Streamlined Energy and Carbon Reporting (SECR) requires large UK companies and LLPs to report annual energy use and carbon emissions. Expert guide to compliance requirements, thresholds and deadlines.
UK companies affected
Thresholds to qualify
Mandatory reporting
Where disclosed
SECR (Streamlined Energy and Carbon Reporting) was introduced by the UK government through Companies Act 2006 amendments in 2019. It requires large companies to disclose energy use and carbon emissions in their annual reports.
All UK incorporated companies listed on London Stock Exchange Main Market, NYSE, NASDAQ, or EEA regulated markets - regardless of size
Must meet at least 2 of these 3 thresholds:
Important: Parent companies must report on a group basis if the group exceeds thresholds. Subsidiaries are exempt if included in parent's group report.
UK and offshore area energy consumption
Scope 1 (direct) and Scope 2 (energy indirect)
Emissions per unit of activity (e.g., tCO2e/£m revenue)
GHG Protocol or ISO 14064-1 typically
Measures taken during the reporting year
Year-on-year data for trend analysis
Companies using less than 40,000 kWh of energy in the UK per year can state they are a low energy user instead of disclosing full energy and carbon data. This must be stated in the Directors' Report.
1 January - 31 December 2026
Reporting period - collect energy and emissions data
January - March 2027
Calculate emissions, prepare SECR disclosure
By 30 September 2027
File annual report with SECR disclosure (private company)
Important: UK SRS will substantially supersede SECR for large companies from 2027 onwards. However, SECR remains in force for companies below the UK SRS threshold. Many companies will need to comply with both.
| Aspect | SECR | UK SRS |
|---|---|---|
| Scope | Energy & carbon only | All sustainability topics |
| Companies Affected | 11,900 large companies | 1,600 listed (initially) |
| Emissions Coverage | Scope 1 & 2 mandatory | Scope 1, 2 & 3 mandatory |
| Disclosure Location | Directors' Report | Separate sustainability report |
| Assurance | Not required | Phased requirement |
| Complexity | 1-2 pages typical | 30-50 pages typical |
Using outdated or incorrect emission factors leads to misstatement.
Solution:
Use current UK Government GHG Conversion Factors published annually by DEFRA. Update factors each reporting year.
Missing overseas operations or certain emission sources.
Solution:
Report global Scope 1 & 2 emissions for quoted companies. UK & offshore only for unquoted. Document exclusions clearly.
Choosing an intensity ratio that doesn't reflect business activity.
Solution:
Select metric relevant to your sector: revenue for services, production units for manufacturing, floor area for property.
Stating "no measures taken" damages credibility.
Solution:
Document all efficiency actions, however small. Include LED upgrades, equipment replacement, behavioural campaigns.
Starting after year-end causes delays and data gaps.
Solution:
Establish monthly data collection processes. Maintain rolling 12-month view. Automate where possible through utility portals.
Changing calculation methods year-on-year prevents comparison.
Solution:
Document methodology thoroughly. Only change if necessary and explain changes clearly. Restate prior year if material.
A typical SECR engagement for a large private company involves:
Initial data audit to establish energy consumption across all operated assets
Calculation of Scope 1 and 2 emissions using appropriate emission factors
Drafting the SECR narrative for your Directors' Report with review before submission
Non-compliance is a criminal offence under the Companies Act. Directors can face personal fines. The company can be prosecuted and fined. Companies House may reject accounts without SECR disclosure.
No, external verification is not mandatory for SECR. However, your statutory auditor will check that SECR disclosure is present and consistent with the financial statements. Many companies choose voluntary verification for credibility.
SECR and ESOS Phase 3 both apply to large companies but serve different purposes. SECR requires annual emissions reporting; ESOS requires energy audits every 4 years. Companies need to comply with both where applicable. ESOS deadline is 5 December 2026.
Scope 3 is voluntary under SECR but increasingly expected. Many companies report business travel as a minimum. With UK SRS requiring full Scope 3 from 2027, starting voluntary Scope 3 reporting now provides good preparation.
Only if your UK energy use is below 40,000 kWh per year (approximately £6,000-8,000 energy spend). This must be stated in the Directors' Report. Note: very few large companies qualify for this exemption.
For location-based reporting (mandatory), use grid average emission factors regardless of tariff. For market-based reporting (optional), renewable tariffs can show zero emissions if backed by appropriate certificates (REGOs in UK).
Don't risk non-compliance. Our SECR experts ensure accurate reporting and help identify efficiency opportunities.