The SECR reporting guidance is new legislation that was passed into law in April 2019. SECR replaced the Carbon Reduction Commitment scheme. The scheme has introduced new requirements for carbon and energy emissions reporting for large businesses in the UK. This has put far more responsibilities on organizations to choose how they have reported and measured their emissions.

The UK government has made it mandatory for the business to reduce emissions to meet the 4th carbon budget.  A 51% reduction of total carbon emissions is required by the year 2027. This is a challenging feat. To demonstrate the reduction of emissions successfully businesses must first measure them using industry-approved methodologies and later publish them in their annual company reports. The emission data can be viewed externally by stakeholders which can then be used for their decision-making procedures, such as investment decisions in the company.

The SECR Reporting Guidance states that companies operating in the UK must publish the following details for every financial year:

  • UK energy use
  • A detailed narrative on the energy efficiency action taken
  • Mentioning the methodologies used in the calculation of the disclosures.
  • An emissions intensity metric
  • Associated scope 1 and scope 2 emissions.

Energy usage even at its most minimum will include transport, gas, and electricity. Companies can also optionally report their scope 3 ‘value chain’ emissions. The intensity metric should hold relevance to the industry of the organization. For example in the property sector, tonnes of CO2e per total square meters are an industry-wide efficiency metric.

There are certain regulations and if your corporation meets them then you will have to report UK energy usage and the associated greenhouse gas emissions relating to the electricity, transport, and gas usage.

Components of the greenhouse gases are as follows:

  • Carbon dioxide- Carbon dioxide usually enters the atmosphere through solid waste and burning fossil fuels for energy and also as a result of some chemical reactions. Carbon dioxide is moreover removed from the atmosphere when plants absorb it.
  • Methane- During the production of natural gas, oil, and coal, methane is emitted. Methane emissions moreover result from agricultural practices and livestock and also by the organic waste decay in the municipal solid waste landfills.
  • Nitrous oxide- In industrial activities, nitrous oxide is emitted. It is the combustion of solid waste and fossil fuels.

Each of these gases can remain in the atmosphere for different amounts of time, ranging from a few years to thousands of years.

The SECR Reporting Guidance, therefore, is a string parameter of the fact that environmental concerns are increasingly coming first for businesses and consumers.  The rapid development and industrialization has violated several norms of the environment and it is thus time to act responsibly to save the future. What’s more energy and carbon reporting lead to greater business efficiency in the use of resources and from its supply chain.