SECR Reporting UK: Streamlined Energy and Carbon Reporting Explained

Streamlined Energy and Carbon Reporting is the mandatory framework that embeds energy and emissions disclosure into the statutory accounts of large UK businesses. Introduced by the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, SECR replaced the Carbon Reduction Commitment Energy Efficiency Scheme for most large organisations and extended mandatory carbon disclosure to a significantly wider pool of businesses than any previous UK scheme.

For finance directors, company secretaries, and sustainability leads, understanding which entities must report, what must be disclosed, and where it sits in the annual report cycle is essential to avoiding the criminal liability that attaches to non-compliant accounts under the Companies Act 2006.

Who must report under SECR

SECR applies to three categories of UK entity:

• Quoted companies: UK-incorporated companies whose shares are listed on the London Stock Exchange Main Market, AIM, a regulated market in an EEA state, or a market outside the EEA. These have reported on greenhouse gas emissions since 2013 under the predecessor Companies Act amendment, and SECR extended and standardised those obligations.
• Large unquoted companies: UK-incorporated companies that are not quoted but meet at least two of the three Companies Act 2006 "large company" thresholds: more than 250 employees, turnover above £36 million, or balance sheet above £18 million.
• Large LLPs: limited liability partnerships incorporated in the UK that meet the same two-out-of-three size thresholds as large unquoted companies.

Small companies, micro-entities, and entities below the thresholds are exempt. A company that crosses the thresholds in one year and drops below them in the next must assess its position for each reporting year independently. A company qualifies as large if it met the criteria in the financial year being reported on.

What large unquoted companies must disclose

For large unquoted companies and large LLPs, the minimum SECR disclosure in the directors' report (or energy and carbon report for LLPs) must include:

• UK energy consumption in kilowatt-hours, covering electricity, gas, and transport fuel used for business purposes
• Associated UK greenhouse gas emissions in tonnes of carbon dioxide equivalent (tCO2e), covering at minimum scope 1 (direct combustion) and scope 2 (purchased electricity) emissions
• At least one intensity ratio, expressing emissions or energy use relative to a business metric appropriate to the organisation (for example, tCO2e per employee, per unit of turnover, or per square metre of floor space)
• A description of the energy efficiency measures taken in the reporting year, or a statement that no such measures were taken
• The methodology used to calculate the figures

There is no prescribed methodology, but DESNZ guidance points to the GHG Protocol Corporate Standard and the BEIS/DESNZ conversion factors as the appropriate basis for calculations. Using conversion factors that are out of date is a common error - DESNZ publishes updated factors annually and the most recent version should always be applied.

What quoted companies must additionally disclose

Quoted companies face a more detailed disclosure requirement. In addition to the elements required of large unquoted companies, they must:

• Report global (not just UK) greenhouse gas emissions, though they may also choose to report UK separately
• Disclose scope 1 and scope 2 emissions, with scope 3 encouraged but not mandated under SECR itself (other frameworks, such as TCFD, increasingly drive scope 3 disclosure)
• Provide the mandatory intensity ratio
• Include a description of energy efficiency measures globally, not just in the UK

For quoted companies, SECR disclosure sits alongside TCFD-aligned climate reporting requirements that apply to premium listed companies and other categories under the FCA Listing Rules. The two frameworks interact but are not identical, and companies should ensure their SECR figures are consistent with climate-related disclosures made elsewhere in the annual report.

The intensity ratio requirement

The intensity ratio is a normalisation measure that allows emissions or energy to be tracked relative to business scale. The regulation requires at least one ratio but does not prescribe which metric to use as the denominator. Common choices include:

• Tonnes of CO2e per employee (full-time equivalent)
• Tonnes of CO2e per £1 million of turnover
• Kilowatt-hours per square metre of occupied floor space
• Tonnes of CO2e per unit of production (for manufacturing)

The chosen denominator should be meaningful for the business model and consistent year-on-year to allow trend analysis. A company that changes its intensity metric between reporting years should explain the reason for the change and, where possible, restate the prior year figure on the new basis.

Where SECR sits in the directors' report

SECR disclosure for large unquoted companies must appear in the directors' report section of the annual accounts, which is filed at Companies House. It cannot be relegated to a standalone sustainability report or published only on a website. The figures in the directors' report are subject to the same directors' responsibilities statement as the financial statements.

For large LLPs, the equivalent document is the energy and carbon report, which must be filed alongside the annual accounts. The LLP's designated members are responsible for signing off the report.

For quoted companies, the emissions disclosure must appear in the strategic report rather than the directors' report, as amended by the 2018 regulations. This positioning gives the information greater prominence in the annual report document.

Methodology and conversion factors

The regulation does not mandate a specific standard, but DESNZ guidance recommends the GHG Protocol Corporate Standard. Practical steps in preparing SECR figures:

1. Collect energy consumption data: utility bills (electricity and gas), fuel purchase records, mileage records for transport
2. Apply the current DESNZ/BEIS conversion factors to convert kWh of fuel to kgCO2e, and then sum to tCO2e
3. Electricity should use the grid average emission factor for the year, unless a supplier-specific factor is available and documented
4. Transport includes company-owned vehicles (scope 1), leased vehicles used for business (scope 1 or 3 depending on lease type), and grey fleet (employee-owned vehicles used for work - typically scope 3 but must be addressed if material)
5. Calculate the intensity ratio using the chosen denominator
6. Document the methodology, including which conversion factor version was used and the source of energy data

DESNZ publishes an annual conversion factors document that covers electricity, gas, liquid fuels, and transport. The document for the relevant reporting year should be downloaded and archived as part of the evidence base.

Exemptions and exclusions

Several categories of energy use may be excluded from SECR reporting:

• Energy not consumed in the UK (for unquoted companies, overseas operations are excluded though may be reported voluntarily)
• Consumption below the de minimis threshold of 40 MWh per year in total - organisations consuming less than this volume are exempt from SECR entirely
• Subsidiaries below the size thresholds, if they are being excluded from a group report (though the group entity must cover them if it is large)

A company that is part of a group should clarify whether its SECR reporting will be covered by a parent company's group-level report or whether it must produce its own separate disclosure. The regulations allow a subsidiary to be included in a parent's report rather than producing its own, provided the parent is also subject to SECR.

Criminal liability for non-compliance

SECR is enforced through the Companies Act 2006. If a company's annual accounts do not include the required SECR disclosure, the directors who approved the accounts are guilty of an offence. The offence carries a fine (currently unlimited in England and Wales following the Legal Aid, Sentencing and Punishment of Offenders Act 2012). Companies House has no mechanism to reject accounts on grounds of missing SECR content at filing, but the Financial Reporting Council and Conduct Committee can investigate and report, and shareholder litigation is possible where the omission is material.

Frequently asked questions

Editorial disclaimer: This article explains the SECR framework as set out in the Companies (Directors' Report) and LLP (Energy and Carbon Report) Regulations 2018 and does not constitute legal or accounting advice for any specific organisation.

Does SECR apply to overseas-registered companies operating in the UK?

SECR applies to UK-incorporated companies and UK LLPs. Overseas companies operating in the UK through a branch are not directly subject to SECR for their UK branch energy use, though they may be subject to equivalent disclosure obligations under the laws of their country of incorporation. UK subsidiaries of overseas parent companies are subject to SECR if they meet the size thresholds.

Can SECR and ESOS audits use the same energy data?

Yes. The energy consumption data collected for ESOS compliance - utility bills, meter records, transport fuel data - is also the basis for SECR calculations. Organisations can reduce duplication by aligning the reference periods used for each scheme where possible and using a single data-gathering process to serve both obligations. The two schemes have different compliance deadlines and different output formats, so they cannot be satisfied by the same document, but the underlying data can be shared.

What if a company has no energy efficiency measures to report?

The regulation explicitly allows a statement that no energy efficiency measures were taken in the reporting year. Companies must not simply omit the section - they must include a positive statement confirming no measures were taken. Omitting the section entirely is non-compliant, even if the honest answer is that nothing was done.

Are scope 3 emissions required under SECR?

Scope 3 emissions (indirect emissions from the supply chain, business travel in vehicles not owned or controlled by the company, waste, and purchased goods) are not mandatory under SECR for most companies. The regulation requires scope 1 and scope 2 as a minimum. Scope 3 disclosure is encouraged in DESNZ guidance and is increasingly required by other frameworks such as TCFD and SBTi, but failing to include it does not constitute non-compliance with SECR itself.

How far back must historical comparatives be provided?

SECR does not require multi-year historical data. It requires the current year's figures and a prior year comparative for the intensity ratio, to allow trend assessment. For quoted companies, the prior year comparative is required for emissions figures as well. There is no requirement to restate figures for years before SECR came into force (financial years beginning before 1 April 2019).

How we verified this

This article draws on the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155) as published on legislation.gov.uk, DESNZ's SECR guidance documents at gov.uk, and the Companies Act 2006. Penalty provisions reflect the Legal Aid, Sentencing and Punishment of Offenders Act 2012 as it applies to company offences. No aggregator or consultancy content was used as a primary source.

Sources

• Companies (Directors' Report) and LLP (Energy and Carbon Report) Regulations 2018 - legislation.gov.uk
• DESNZ: Environmental reporting guidelines - gov.uk
• DESNZ: GHG conversion factors 2024 - gov.uk
• Companies Act 2006 - legislation.gov.uk

For more on mandatory energy audits, see esos-compliance-uk-guide. For net-zero planning for businesses, see business-energy-net-zero-uk.