SECR Reporting in Practice: A Practical Guide for UK Businesses

Since April 2019, thousands of UK businesses have been legally required to disclose their energy consumption and carbon emissions in their annual report. The regime is called Streamlined Energy and Carbon Reporting — SECR — and despite being five years old, it still catches organisations out, either because they do not realise they are in scope, or because they know they are in scope but are not sure they are doing it correctly.

This guide explains exactly what SECR requires, who it applies to, what the most common mistakes are, and how to build a data collection process that makes annual compliance straightforward rather than a last-minute scramble.

What Is SECR?

SECR stands for Streamlined Energy and Carbon Reporting. Introduced through the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, it replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and extended mandatory carbon reporting to a much wider range of organisations.

The scheme requires qualifying organisations to disclose their UK energy consumption, associated greenhouse gas (GHG) emissions, and related information within their annual report — the same document filed with Companies House each year. The word “streamlined” in the name reflects the policy intention: rather than operating separate reporting systems, the disclosure is embedded in existing corporate reporting processes.

SECR is separate from ESOS (the Energy Savings Opportunity Scheme), although the two regimes use some of the same underlying data. ESOS is about conducting audits every four years; SECR is about annual disclosure. A business can be subject to one, both, or neither, depending on its size and structure.

Who Must Comply with SECR?

Three categories of organisation are within scope.

Quoted companies — meaning those listed on the London Stock Exchange’s main market, AIM, or an overseas equivalent — must comply regardless of their size. A small quoted company with fewer than 50 employees is still required to report under SECR.

Large unquoted companies must comply if they meet at least two of the following three criteria in the relevant financial year: 250 or more employees; annual turnover exceeding £36 million; balance sheet total exceeding £18 million.

Large LLPs (limited liability partnerships) are subject to equivalent thresholds under the separate LLP regulations.

The relevant financial year is the one for which the annual report is being prepared. If you dip below the thresholds in one year, you may be able to claim an exemption — but you should take advice before doing so, as the rules on transitional exemptions have specific conditions.

What Must Be Disclosed in the Annual Report?

A compliant SECR disclosure in the directors’ report (or energy and carbon report for LLPs) must include the following elements.

UK energy use in kWh. This means all energy consumed by the organisation in the UK during the reporting year, broken down by fuel type (electricity, gas, transport fuels, and any other energy vectors such as heat or steam purchased from third parties). Only UK operations are mandatory, but the regulations encourage disclosure of global figures where material.

Scope 1 and Scope 2 greenhouse gas emissions in tonnes of CO2 equivalent (tCO2e). Scope 1 covers direct emissions from sources owned or controlled by the organisation — natural gas combustion, fuel burned in company-owned vehicles, refrigerant leaks from air conditioning and refrigeration systems. Scope 2 covers indirect emissions from the consumption of purchased electricity (and, where applicable, purchased heat or steam).

An intensity metric. Organisations must report at least one energy or carbon intensity figure — a ratio that normalises their consumption data against a relevant business metric. Common choices include kWh per £ million of turnover, kWh per tonne of product, kWh per full-time equivalent employee, or tCO2e per £ million of revenue. There is flexibility in choosing the metric, but once chosen, it should be applied consistently year on year to allow meaningful comparison.

Previous year comparators. SECR requires you to present current year figures alongside the equivalent figures from the previous reporting year. This is why consistency of methodology matters — if you change your approach mid-stream, the year-on-year comparison becomes misleading.

Energy efficiency actions taken. The disclosure must include a description of the principal energy efficiency measures your organisation has undertaken during the reporting year. There is no minimum threshold for what constitutes a “principal measure” — the intention is to give readers of the annual report a genuine picture of management activity.

Methodology statement. You must state the methodology used to calculate your emissions figures. In practice, this means referencing the emission conversion factors used (see below) and explaining any estimation or extrapolation applied to incomplete data.

Scope 1 Versus Scope 2: Why the Distinction Matters

The Scope 1 / Scope 2 framework comes from the GHG Protocol, the globally used standard for corporate carbon accounting. Understanding the distinction is important because the two scopes have different emission factors and different management levers.

Scope 1 emissions arise from sources under your direct operational control. If you burn natural gas in your boilers, the CO2 released is Scope 1. If your company cars run on diesel, the exhaust emissions are Scope 1. If you use refrigerants in your air conditioning systems and those refrigerants escape, the resulting emissions (often expressed as CO2 equivalent because some refrigerants have very high global warming potentials) are Scope 1.

Scope 2 emissions arise from the consumption of electricity you purchase from the grid. Your organisation does not burn anything at site to produce electricity, but the power stations that generated that electricity did — so the emissions are attributed to you as the purchaser. The UK grid has a published annual average emission factor (currently in the region of 207 gCO2e/kWh for 2023, declining year on year as renewable generation increases) that is used for this purpose.

Understanding this distinction helps with strategy. Reducing Scope 1 emissions often means fuel switching (replacing gas boilers with heat pumps, electrifying your fleet) or improving efficiency. Reducing Scope 2 emissions can be achieved through on-site generation, purchasing renewable electricity, or — depending on your reporting approach — backing your supply with renewable energy certificates.

Choosing and Sticking to Your Intensity Metric

The intensity metric requirement is the element of SECR that organisations most often underestimate. Choosing badly creates problems for years.

The metric you choose should be the one that best reflects the relationship between your energy use and your business activity. For a manufacturer, kWh per tonne of output is often the most meaningful measure — it isolates efficiency from the effects of changing production volumes. For a professional services firm, kWh per FTE or kWh per £ million of revenue is more appropriate. For a hotel or hospitality business, kWh per occupied room night might be most relevant.

Whatever you choose, document the decision and apply it consistently. If you later change the metric — because your business model changes, or because you realise the original choice was not fit for purpose — you will need to restate historical comparators and explain the change. That is not catastrophic, but it does add complexity.

Benchmarking your intensity metric against published sector averages can also be valuable. The Carbon Disclosure Project (CDP), the Energy Institute, and various trade bodies publish sector-level energy intensity data. Knowing whether your intensity is above or below the sector average gives management useful context and gives external stakeholders — including investors, customers, and lenders — a basis for assessing your performance.

Common SECR Mistakes

After five years of the regime, certain errors recur consistently.

Using the wrong emission factors. UK SECR disclosures must use the emission conversion factors published annually by the Department for Energy Security and Net Zero (DESNZ), formerly BEIS. Many organisations use factors from memory, from a previous year, or from a different jurisdiction. The factors are updated each year and are available free on GOV.UK. Using the wrong factors does not just produce an inaccurate number — it also invalidates your methodology statement.

Forgetting overseas operations. Only UK energy consumption is mandatory for SECR purposes, but the regulations recommend that organisations with material overseas operations disclose global figures as well. If your business has significant operations outside the UK — a manufacturing facility in Poland, for example, or a network of stores across Europe — excluding those from your disclosure entirely, without acknowledgement, can create a misleading impression and may draw scrutiny from investors or lenders.

Inconsistent methodology year on year. Changing your methodology without restatement is a common problem. If you included grey fleet (employees’ own vehicles used for business travel, reimbursed by mileage) in your Scope 1 figures in year one but excluded it in year two because data collection proved difficult, your comparators are not like-for-like. The solution is not necessarily to include difficult-to-obtain data every year — it is to be consistent and transparent about what is included and what is not.

Missing transport fuel. Scope 1 must include transport fuel for company-owned or -leased vehicles. Organisations with large fleets sometimes manage fuel data separately from buildings energy, and the two streams do not always find their way into the same SECR disclosure. A thorough data-gathering process needs to cast the net across both.

Leaving the disclosure too late. The SECR disclosure must appear in the annual report, which itself must be filed with Companies House within nine months of the year end (for private companies). Many businesses treat energy data collection as a finance-team exercise that can begin six weeks before the filing deadline. In practice, chasing missing invoices, correcting billing errors, and obtaining sub-metered data for multi-site estates can take considerably longer.

The Data Collection Challenge

For a single-site business with one gas meter and one electricity meter, SECR data collection is straightforward. For a multi-site business with 20 or 50 or 200 locations — each potentially with multiple meters, multiple fuel types, and multiple suppliers — it is a substantial project.

The core requirement is a complete record of energy consumed at every UK site during the 12-month reporting period, expressed in kWh. For metered energy (gas and electricity), this means either meter read data or supplier invoices covering every billing period within the year. It is common to find that some meters have estimated reads (rather than actual reads) for one or more months, requiring adjustment, or that one site changed supplier mid-year, creating a gap in the data.

Transport fuel data typically comes from fuel card statements, company credit card records, or fleet management system reports. If the fleet includes electric vehicles charged on a home charge point or public network, capturing that consumption is genuinely difficult — a reasonable estimation approach, documented clearly, is acceptable.

Refrigerant consumption (for Scope 1) requires data on top-ups from air conditioning and refrigeration maintenance records. This is often overlooked but can be material for businesses with large cold store operations or extensive air conditioning.

A well-organised data collection process assigns clear responsibility for each data type, sets an internal deadline several weeks before the external filing deadline, and maintains a live log of what has been received and what is outstanding. Building this process takes time initially but pays back in every subsequent year.

SECR as the Foundation for Net Zero

The most important strategic use of SECR data is not the compliance disclosure itself — it is the baseline it establishes for net zero planning.

Any credible net zero strategy begins with a clear understanding of current emissions: where they come from, how large they are, and how they have changed over time. A well-maintained SECR reporting history gives you exactly that for Scope 1 and Scope 2. It tells you whether your absolute emissions are going up or down, whether your intensity is improving, and which energy streams are responsible for the largest share of your footprint.

Layering Scope 3 emissions onto that foundation — supply chain, purchased goods, business travel, employee commuting, and downstream use of sold products — is the natural next step for organisations that want to go beyond mandatory compliance and engage seriously with net zero. Scope 3 is not yet required for SECR, but it is increasingly expected by larger customers, by the financial sector, and by the government’s own procurement rules (see PPN 06/21, which requires Scope 1 and 2 data from government contract bidders above £5 million).

Organisations that have built a robust SECR reporting process are in a significantly better position to respond to these wider pressures than those that treat the annual disclosure as a box-ticking exercise.

How Telnergy Can Help

We work with multi-site SMEs across hospitality, retail, manufacturing, and healthcare to pull together the energy consumption data that SECR requires. That means consolidating meter-level data from multiple suppliers, filling gaps in the record, applying the correct DESNZ emission factors, and presenting the figures in a format that your finance team or auditors can use directly in the annual report.

We also help clients draft the SECR narrative — the energy efficiency actions section that many companies struggle to articulate clearly. And because we handle procurement for many of the same clients, we have a detailed, ongoing picture of their energy use that makes data retrieval considerably more efficient than starting from scratch each year.

If your annual report deadline is approaching and you are not confident in your SECR data, or if you want to build a more robust process for next year, we are happy to talk through what is involved.

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Frequently Asked Questions

Does SECR apply to subsidiaries within a group, or only to the parent?

It applies at the legal entity level. Each qualifying company within a group must make its own SECR disclosure in its own annual report. A parent-level SECR disclosure does not automatically cover subsidiaries. That said, some groups choose to prepare a consolidated energy dataset centrally and then attribute figures to individual legal entities, which can be an efficient approach.

What happens if we do not make a SECR disclosure?

Failure to include the required SECR disclosure in the annual report means the annual report is non-compliant, which in turn means the filing with Companies House is defective. The consequences include potential enforcement action by Companies House, and the disclosure failure is visible on the public register — which creates reputational risk with investors, lenders, and customers.

We consume very little energy — do we still have to report?

There is a de minimis exemption for organisations whose energy use is negligible. If your organisation consumed no energy at all (which is extremely rare), or only a very small amount, you may be able to claim this exemption — but you must explicitly state in the annual report that you are claiming it and why. This is not a get-out for businesses that consume a normal amount of energy but find data collection inconvenient.

Can we use a previous year’s emission factors if we cannot find the current ones?

No. The DESNZ emission conversion factors are updated annually and are freely available on GOV.UK. Using outdated factors is not compliant and, given that the factors change to reflect changes in the grid mix and fuel-specific emission intensities, it will also produce inaccurate figures.

Do we need to report energy from renewable sources separately?

The total energy consumption figure should include all energy consumed, regardless of source. However, if you have procured renewable electricity backed by Guarantees of Origin (REGOs) or equivalent instruments, you may be able to report a lower Scope 2 figure using a “market-based” approach, alongside a “location-based” figure using the standard grid factor. Both approaches are discussed in the DESNZ guidance — the key requirement is transparency about which approach you are using.

How does SECR relate to the Task Force on Climate-related Financial Disclosures (TCFD)?

They are separate regimes, but complementary. SECR provides the energy and Scope 1+2 emissions data that underpins the transition risk and opportunity analysis that TCFD requires. Larger listed companies are now subject to mandatory TCFD-aligned disclosures. For many organisations, building a robust SECR process is the first step towards TCFD readiness.

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Telnergy is an independent commercial energy consultancy (Ofgem registered TPI, ADR Ref E3561). We’ve helped UK businesses reduce energy costs since 2002. Get in touch to discuss your energy strategy.