Introduction
Streamlined Energy and Carbon Reporting, commonly referred to as SECR, is a UK reporting framework designed to improve transparency around how businesses use energy and manage their carbon emissions. It forms part of the government’s wider approach to climate accountability and responsible business practice.
But for many UK companies, SECR is more than just a reporting exercise. It is a way to better understand energy consumption, identify inefficiencies and demonstrate environmental responsibility to investors, customers, and regulators. For forward-looking companies, energy and carbon reporting now sits alongside financial reporting as a key indicator of long term resilience and operational efficiency.
In this guide, we explain what SECR is, who must comply, what needs to be reported, and crucially, why it matters for UK businesses operating in an increasingly sustainability-focused environment.
What is SECR
SECR Definition and Purpose
SECR is a statutory reporting framework that requires qualifying UK businesses to disclose their energy use and associated greenhouse gas (GHG) emissions as part of their annual reporting. The framework is designed to make energy and carbon data more visible at board level and more accessible to stakeholders, elevating it to the way we expect financial reporting to be conducted.
The purpose of SECR is to encourage better energy management by embedding energy and emissions data into mainstream company reporting. By doing so, businesses are prompted to track consumption more closely, consider efficiency measures, and link environmental performance to operational decision making. All good stuff.
There’s also a wider benefit: SECR also supports wider corporate transparency by ensuring that energy and carbon information is reported in a consistent and structured way across organisations. It’s this kind of cross-sector change that is so badly needed.
Why SECR Was Introduced
SECR was introduced to expand energy and carbon reporting beyond a limited group of organisations. Earlier schemes applied to fewer businesses and often operated separately from financial reporting. SECR replaced these fragmented approaches with a more streamlined framework that aligns with existing company reporting structures.
The introduction of SECR also reflects growing recognition that energy efficiency delivers both environmental and economic benefits. By requiring businesses to disclose energy use and emissions, the framework encourages cost reduction, productivity improvements, and more informed investment decisions.
SECR also aligns with international expectations around climate related disclosures, supporting the transition to a lower carbon economy. This helps UK businesses compete alongside their international contemporaries, particularly in the EU.
Who Must Comply with SECR
Quoted Companies
Quoted companies are organisations whose equity share capital is listed on a recognised stock exchange. These businesses already have established reporting obligations and SECR builds on existing requirements rather than replacing them.
Quoted companies must report their global energy use and greenhouse gas emissions, covering activities for which they are responsible. The aim is to provide investors with consistent and comparable information about environmental performance alongside financial results.
Large Unquoted Companies and LLPs
It’s not just listed companies that must report. SECR introduced new reporting obligations for large unquoted companies and large limited liability partnerships. An organisation is generally considered large if it meets at least two of the following criteria during a reporting year:
- A turnover of £36 million or more
- A balance sheet total of £18 million or more
- An average of 250 employees or more
These thresholds mean that many privately owned businesses and professional partnerships now fall within the scope of SECR for the first time. The focus is primarily on UK energy use rather than global activity.
Exemptions and Low Energy Users
Some organisations may be exempt from detailed SECR reporting if their energy use is considered low. A low energy user is typically defined as a business consuming 40 megawatt hours of energy or less during the reporting period.
Even where this exemption applies, a statement must still be included confirming low energy usage. This ensures transparency while recognising that detailed reporting may not be proportionate for very low consumption businesses.
SECR Reporting Requirements
Core Energy and Emissions Disclosures
SECR requires businesses to report their energy use and associated greenhouse gas emissions. For quoted companies, this includes global energy consumption. For large unquoted companies and LLPs, the focus is on UK energy use from electricity, gas, and transport fuel.
Emissions must be reported in tonnes of carbon dioxide equivalent, allowing different greenhouse gases to be measured on a consistent basis. This creates a clearer picture of the organisation’s environmental impact.
Intensity Ratios
In addition to absolute emissions figures, businesses must report at least one emissions intensity ratio. An intensity ratio links emissions to a business metric, making performance easier to understand and compare.
That could be emissions per employee, emissions per unit of revenue, or emissions per square metre of floor space. The choice of metric should be relevant to the organisation’s activities and should remain consistent year to year where possible. The goal is for emissions intensity to decrease over time, meaning fewer tonnes of carbon dioxide equivalent are produced per unit of activity. For example, a reduction from 1 tonne per employee to 0.75 tonnes over three years.
Energy Efficiency Actions
SECR is not a tickbox exercise – a key element of SECR is the requirement to include a narrative describing energy efficiency actions taken during the reporting year. This section explains what steps the business has taken to reduce energy consumption or emissions.
These could include upgrading lighting systems, improving insulation, optimising transport routes, or investing in more efficient equipment. And if no measures have been taken, this must also be stated. It is this crucial narrative that encourages accountability and highlights practical progress rather than just numerical data.
Calculation Methodologies and Comparatives
Businesses must disclose the methodology used to calculate energy use and emissions. While no single method is prescribed, the approach must be robust, transparent, and widely recognised.
SECR also requires comparative figures from the previous reporting year, where available. This allows stakeholders to track progress over time and assess whether energy management strategies are delivering results.
Reporting Presentation and Filing
SECR disclosures are typically included within the Directors’ Report or an equivalent section of the company’s annual report. In some cases, where energy and carbon matters are considered strategically important, disclosures may appear in the Strategic Report instead.
Limited liability partnerships must include the required information in an Energy and Carbon Report. All disclosures must align with the financial reporting period and be filed as part of the statutory accounts submitted to Companies House.
Clear presentation and consistency are important, as SECR data is increasingly scrutinised by investors, lenders, and other stakeholders.
Benefits of SECR Compliance
While compliance is a legal requirement for many businesses, SECR also offers practical benefits. Regular energy reporting can highlight inefficiencies that may otherwise go unnoticed. This can lead to reduced operating costs and improved resource management.
SECR also supports better internal decision making. When energy data is reviewed at board level, it becomes easier to prioritise investment in efficiency improvements and align sustainability goals with commercial strategy.
Externally, transparent reporting helps build trust with stakeholders and demonstrates that the business is taking environmental responsibility seriously.
Common Challenges and Considerations
Data collection is one of the most common challenges, particularly for organisations with multiple sites or complex operations. Ensuring consistent data quality across the business requires clear processes and internal coordination.
Some businesses may also find it difficult to determine whether they meet the size thresholds, particularly during periods of growth or restructuring. Borderline cases require careful assessment each reporting year.
Understanding the boundaries of Scope 1 and Scope 2 emissions can also be challenging, especially where energy supply arrangements are complex. Clear documentation and methodology disclosure help address these issues, and a good environmental consultant will be able to help you with this.
SECR and Broader Sustainability Strategies
SECR should not be viewed in isolation – addressing the impact of your business can ensure the long-term sustainability of that organisation. It can act as a foundation for wider sustainability reporting and long term carbon reduction planning. Many businesses use SECR data to inform net zero strategies, energy audits, and investment decisions.
SECR also aligns with other reporting frameworks and climate related disclosure expectations. By embedding energy and carbon reporting into annual accounts, businesses are better prepared for future regulatory developments and stakeholder expectations.
Conclusion
Streamlined Energy and Carbon Reporting is a key part of the UK’s approach to corporate climate accountability. It requires qualifying businesses to report energy use, greenhouse gas emissions, and efficiency actions in a clear and structured way.
SECR matters because it brings energy management into the core of business reporting. For UK companies, it offers both a compliance framework and an opportunity to improve efficiency, reduce costs, and strengthen stakeholder confidence.
With the right approach, SECR can support better decision making and contribute to long term resilience in a changing regulatory and environmental landscape.
FAQs
What does SECR stand for?
SECR stands for Streamlined Energy and Carbon Reporting. It is a UK framework for reporting business energy use and carbon emissions.
Who needs to comply with SECR?
Quoted companies, large unquoted companies, and large limited liability partnerships that meet specific size criteria are required to comply.
What energy sources must be reported under SECR?
This typically includes electricity, gas, and transport fuel used for business activities, depending on the type of organisation.
Are small businesses required to report under SECR?
Most small businesses fall outside the scope, although voluntary reporting is encouraged where appropriate.
What happens if no energy efficiency measures are taken?
The business must state that no measures were taken during the reporting year, ensuring transparency.
How can SECR support sustainability goals?
SECR provides a structured way to measure energy use and emissions, helping businesses plan reductions and align with broader sustainability strategies.