Achieving net zero is a critical goal for many businesses today. One of the tools to help achieve and encourage this is the Streamlined Energy and Carbon Reporting (SECR) framework.

What is SECR and who needs to comply?
SECR, which came into effect 1 April 2019, was introduced by the UK Government to help businesses benefit from carbon and energy reporting.

Organisations that fall into SECR compliance include all UK-quoted companies, as well as large-incorporated unquoted companies and limited-liability partnerships (LLPs), which meet two of the following criteria:

• Over 250 employees
• Annual turnover of £36 million or over
• Balance sheet total of £18 million or over.

Once an organisation determines it needs to comply with SECR, it can begin to see the benefits of carbon and energy reporting.

How is SECR completed?
Businesses must gather comprehensive data on all their energy use, including electricity, gas and transport. This will require them to have reports on their energy bills and information on their travel.

Organisations must also calculate the carbon emissions they produce to determine the total Scope 1 and 2 of their Greenhouse Gas emissions, with Scope 3 being optional but recommended.

Once the reports for energy and carbon have been completed, organisations must commit to how they plan to reduce their energy and carbon consumption and the actions that have been taken to reduce their energy and carbon footprint.

The impact of carbon reporting on business insights
Through these reporting measures, organisations will gain valuable insights into their business carbon emissions and overall energy use. By using the information they report on, they can make informed decisions on how they would like to reduce their energy and carbon emissions consumption.

Organisations currently place a lot of importance on reporting on finances, however we are moving towards a world where financial data and sustainability are inherently linked. It is essential for businesses to place the same importance on reporting their energy and carbon data as they do on their profit data. By using SECR as a vehicle to start carbon and energy reporting, organisations can take a vital first step in their journey to energy efficiency and carbon reduction, enabling them to gain a comprehensive view of their energy and carbon use so they can start their net zero transition.

How SECR compliance can help organisations meet their net zero targets
The UK Government has established a few regulatory schemes that organisations must comply with to demonstrate their commitment to carbon reduction. One of which is SECR, which promotes transparency in energy reporting.

By openly committing to net zero and making their data easily accessible to the public, organisations can showcase year-on-year improvements in their performance. This transparency not only supports and encourages the implementation of sustainability initiatives but also provides a competitive advantage. Demonstrating a commitment to sustainability can enhance an organsiation’s reputation with customers, stakeholders, and potential recruits, proving they are actively working towards their environmental goals.

However, if an organisation does not put carbon reduction initiatives into place and instead reports an increase in their emissions, they may see an impact on their reputation. Rather than seeing SECR as a compliance tick box, organisations can utilise it to support them in working towards and reaching their net zero targets.

The scheme can also help to identify energy efficiency projects to reduce energy consumption, make cost savings and encourage stakeholder buy-in.

Adopting the SECR principles for successful net zero
The SECR framework aims to support organisations in improving their energy and carbon data collection, placing it at the heart of their net zero transition. By using SECR energy reporting to track this data, it can give organisations insights into the granular details of their consumption, enabling them to start on a positive path to reducing the impact their business has on the planet.

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