Mandatory greenhouse gas emissions reporting was introduced for quoted companies through the Companies Act 2006 (Strategic and Directors’ Reports) Regulations 2013 and is now being expanded through new regulations to capture a greater number of organisations and update the reporting requirements.
The government began consulting on streamlining environmental reporting in 2015 with the final outcome being The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. These 2018 Regulations, which implement the policy on Streamlined Energy and Carbon Reporting (SECR), came into force on the 1st April 2019 and apply to all financial years commencing on or after this date.
The streamlining and consequent SECR are designed to increase awareness of energy costs; better align with other reporting frameworks; provide transparency for investors; and ensure organisations have the data required to enable them to implement energy efficiency measures and ultimately reduce their impact on climate change.
The following organisations are required to report in some form through the new regulations:
- Quoted companies: Those whose equity share capital is officially listed on the main market of the London Stock Exchange; officially listed on a European Economic Area State; or is admitted to dealing on either the New York Stock Exchange or NASDAQ;
- Large unquoted companies: Those that are required to prepare a Directors’ Report under the Companies Act and are ‘large’ (as defined below); and
- Large LLPs: LLPs that meet two or more of the following requirements: Turnover of ≥ £36 million; Balance sheet total of ≥ £18 million; and/or ≥250 employees.
Under the regulations, the following information is required to be reported through annual reports:
| Quoted companies | Large unquoted companies & large LLPs |
| Global greenhouse gas emissions that the company is responsible for (Scope 1 & Scope 2 emissions) | UK energy use including gas, electricity & transport fuel as a minimum |
| Underlying global energy use used to calculate greenhouse gas emissions | Associated greenhouse gas emissions |
| Intensity ratio | Intensity ratio |
| Energy efficiency actions | Energy efficiency actions |
| Previous year’s figures for energy use and greenhouse gas emissions | Previous year’s figures for energy use and greenhouse gas emissions |
| Methodology used to calculate new and existing disclosure requirements | Methodology used to calculate new and existing disclosure requirements |
It is expected that the number of additional companies caught under the SECR umbrella will be approximately 12,000 although the government is encouraging all private sector bodies to report as investors and shareholders are increasingly requesting environmental disclosures within annual reports.
Benefits of measuring and reporting environmental performance include lower energy and resource costs; a better understanding of climate change risk exposure and demonstrating green leadership within the marketplace.
Greengage can undertake energy and carbon reporting for organisations captured under the new guidelines; for further information, please contact Chris Burgess chris.burgess@greengage-env.com or 0203 544 4000.
