Summer is over, we have made the penultimate CRC payments and it is 6 months until the start of the financial year that will see the introduction of SECR (Streamlined Energy and Carbon Reporting) legislation.

Although the legislation has not yet been finalised, based on the Government response to the consultation, and draft legislation, we have a very clear idea of how the reporting will impact our clients.

Qualification, although it does not follow exactly the same criteria as ESOS, is designed to capture the same sized companies, but is based on the UK companies house definition of large undertaking, rather than aligned with the EU definition.  It is therefore extremely likely that if you qualify for ESOS, you will also need to look at the requirements for SECR.  There will also be companies that did not meet the balance sheet threshold for ESOS, but will do for SECR, as the level is lower.

For large, UK incorporated unquoted companies, who have not had to report on greenhouse gases before, the requirements are as follows:

• Total UK energy use (including as a minimum electricity, gas and transport (transport defined as road, rail, air and shipping))
• Associated scope 1 and 2 carbon emissions
• Relative emissions incorporating an intensity factor (left to sectors, best practice and the guidance to specify the most appropriate metric)
• Voluntary reporting of UK scope 3 carbon emissions
• A narrative on energy efficiency action over the year

For many qualifying organisations, the majority of the data will already be collated once every 4 years as part of the ESOS exercise.  We would recommend that as part of ESOS phase 2, a methodology and processes are established in order to make repeating the exercise annually as easy as possible.  ESOS phase 2 would also be a good time to ask your lead assessor to look at intensity factors – which factors best mirror changes in energy use for the organisation.

Reporting will be required annually, filed with Companies House in Director’s Reports.

If you would like to talk to us about whether you qualify, any exemptions or what type of data you should be collecting in preparation, please get in touch at AbbyDavey@e2-services.co.uk 

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