What Is SECR? Streamlined Energy and Carbon Reporting

SECR Requires Large UK Companies to Report Their Energy Use and Carbon Emissions in Their Annual Report. It Applies to More Businesses Than Most Finance Directors Realise.

Streamlined Energy and Carbon Reporting — SECR — is a mandatory energy and carbon reporting framework for large UK companies and limited liability partnerships. Introduced in April 2019, SECR requires qualifying organisations to include standardised energy and carbon information in their annual reports and accounts, enabling investors, customers, and stakeholders to assess the organisation’s energy performance and carbon intensity over time.

SECR replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and extended mandatory carbon reporting to a much wider range of organisations than its predecessor.

Who Must Report Under SECR

SECR applies to three categories of organisation:

Quoted companies: UK companies whose securities are admitted to trading on a UK regulated market, an overseas regulated market, or a multilateral trading facility. All quoted companies must report under SECR regardless of size.

Large unquoted companies: Private limited companies that are defined as “large” under the Companies Act 2006. A company is large for SECR purposes if it meets at least two of the following three criteria:

• Annual turnover of £36 million or more
• Balance sheet total of £18 million or more
• 250 or more employees

Large limited liability partnerships: LLPs that meet the equivalent size criteria to large unquoted companies.

Subsidiaries that are included in a parent company’s consolidated SECR report do not need to report separately, provided the consolidated report covers their energy and carbon data.

What Must Be Reported

SECR reporting must include the following information in the organisation’s directors’ report (for companies) or equivalent:

Energy consumption: Total annual energy consumption in kWh, covering all energy used for UK activities including electricity, gas, and other fuels. The report must cover all energy used for the business’s UK operations — buildings, industrial processes, and transport.

Greenhouse gas emissions: Associated Scope 1 and Scope 2 greenhouse gas emissions in tonnes of CO₂ equivalent, calculated using appropriate emission factors (typically the DEFRA/DESNZ published conversion factors for the relevant year).

Energy intensity ratio: At least one energy intensity metric — a ratio of energy consumption or carbon emissions to a relevant business metric such as turnover, floor area, full-time employees, or units produced. This enables year-on-year performance comparison and sector benchmarking.

Previous year’s figures: Comparative data from the previous year must be included, enabling trend analysis.

Methodology statement: A description of the methodology used to calculate energy consumption and emissions.

Energy efficiency actions: A description of the principal energy efficiency actions taken during the reporting year. There is no requirement to quantify the savings from these actions — a narrative description is sufficient.

Scope 1, Scope 2, and the SECR Boundary

The GHG Protocol categorises emissions into three scopes:

Scope 1: Direct emissions from sources owned or controlled by the organisation — burning gas in boilers, fuel combustion in company vehicles, industrial process emissions. Scope 1 is mandatory under SECR.

Scope 2: Indirect emissions from the generation of purchased electricity, heat, steam, and cooling. Scope 2 is mandatory under SECR.

Scope 3: All other indirect emissions in the value chain — purchased goods and services, business travel in non-company vehicles, waste disposal, employee commuting, downstream use of sold products. Scope 3 reporting is encouraged but not mandatory under SECR for most organisations.

SECR therefore requires organisations to track and report their energy consumption from direct combustion (gas, oil, fuel) and from purchased electricity — the two categories that appear directly in energy bills and are therefore most readily measurable from existing data.

Practical Implications for Energy Management

SECR has several practical implications for organisations that must comply:

Data collection discipline: SECR requires annual energy consumption data with sufficient granularity to report by source (electricity, gas, transport fuel). Organisations that have historically managed energy passively — paying bills without systematic consumption tracking — must establish data collection processes to support SECR reporting.

Emission factor selection: Electricity Scope 2 emissions can be reported using either the location-based method (using the average grid emission factor for the UK) or the market-based method (using supplier-specific emission factors or REGO-backed zero-carbon factors where renewable electricity contracts are in place). The market-based method allows organisations to demonstrate lower Scope 2 emissions through renewable electricity purchasing — creating a direct link between energy procurement decisions and SECR carbon figures.

Year-on-year comparability: SECR requires comparative reporting, which means organisations cannot change their reporting methodology or boundary without restatement of prior year figures. Establishing a robust and consistent methodology from the first reporting year avoids restatement complexity later.

SECR and ESOS: Different Obligations, Overlapping Data

ESOS and SECR are separate obligations but draw on overlapping data — both require energy consumption measurement across buildings, processes, and transport. Organisations subject to both ESOS and SECR benefit from building a single, comprehensive energy data management system that satisfies both requirements simultaneously rather than running parallel processes.

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