Streamlined Energy and Carbon Reporting – New Regulations Coming into Force in April 2019

6th December 2018

The current range of energy efficiency policies in place, which businesses must adhere to, can add huge complexities to achieving energy and carbon compliance. In 2016, the government set the goal of increasing transparency of the regulatory requirements of organisations, whilst at the same time reducing any administrative burden placed on organisations to achieve this. They also aimed to ensure consistency for organisations with nationwide operations.  The government has therefore introduced ‘Streamlined Energy and Carbon Reporting’ (SECR)

The government carried out a consultation process in 2016, seeking views from across the UK.  The new framework will come into force in April 2019 and aims to streamline the process of mandatory energy and carbon reporting. Organisations that took part in the consultation have also requested clear, comprehensive and detailed guidance to make the transition as efficient as possible; with this guidance expected to be published in January 2019.

As well as helping to reduce administrative burden, SECR will also provide a framework to raise awareness of energy efficiency, reduce bills, and save carbon.

Picking up the reporting element of the outgoing UK-wide Carbon Reduction Commitment (CRC), SECR will introduce new, and amend existing, requirements.

Under the SECR Regulations, quoted companies will not only have to disclose global emissions and intensity metrics, but now also annually disclose global energy consumption, and identify any energy efficiency action (where appropriate) in the directors’ reports. Quoted companies must also report on the performance of their subsidiaries, with qualifying subsidiaries not being required to report if they are covered under a group report.

The SECR Regulations will also require large unquoted companies and Limited Liability Partnerships (LLPs) to report across the same metrics as quoted companies for their UK operations. However, they may do so in the form of energy and carbon reports if Directors’ reports are not required.

However, Companies or LLPs using a small amount of energy (thought to be equivalent to less than 40,000 kWh at the time of writing) are only required to make a statement in their report to the effect that they are small energy users.

Additionally, it must be noted that the Energy Savings Opportunity Scheme (ESOS) will remain in effect, as a separate reporting requirement.

It is important for businesses to begin to prepare for SECR, and by developing any necessary new systems and processes to meet the reporting deadlines, businesses can ensure that they are ready. They should also review data-collection processes which are currently in place, to ensure that they are only collecting data once, using centralised data collection systems.  The data collected can then be used to report to internal and external stakeholders, including ensuring that senior managers are aware of requirements and that information is released in a timely manner.

The S2 Partnership’s team of specialist environmental consultants work with clients to manage environmental priorities and meet legislative requirements. Working with clients to develop practical solutions and cost-saving opportunities through the use of our risk management platform, RiskWise and environmental audits, our focus is driving continuous improvements by reviewing and applying emerging technologies.

For further information on how the S2 Partnership and RiskWise can help manage your environmental responsibilities or to book a demonstration, please contact our environmental team.