SECR Reporting: A Guide for UK Businesses

Since its introduction in 2019, the Streamlined Energy and Carbon Reporting (SECR) directive has become a key regulatory framework for large UK businesses. Designed to enhance transparency around energy use and carbon emissions, SECR plays an important role in helping companies understand and reduce their environmental impact. 

In this blog, we will break down what the SECR entails, who it applies to, and how businesses can meet compliance requirements while uncovering opportunities for efficiency and growth along the way. 

What is SECR Reporting? 

SECR is a mandatory reporting framework that simplifies and expands the scope of corporate energy and carbon reporting in the UK. The regulation requires large companies to disclose their energy consumption, greenhouse gas emissions, and energy efficiency measures in their annual reports.

Building upon earlier initiatives like the Carbon Reduction Commitment (CRC), SECR extends reporting obligations to a broader range of businesses. Its three primary objectives are: 

1. Increasing transparency around energy use and emissions of businesses.
2. Raising awareness of energy costs within companies to encourage improvements in efficiency.
3. Providing stakeholders with relevant information to make informed decisions about a company’s environmental impact.

However, SECR is not just mandatory reporting, it is also an opportunity for businesses to show climate leadership, and demonstrate how they are actively reducing their environmental impact. By actively tracking and reducing emissions, companies can gain a competitive advantage while contributing to the UK’s decarbonisation goals.

*Note: SECR replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. This transition marked a significant expansion in the scope of carbon reporting in the UK. 

Who needs to comply with SECR? 

The SECR framework applies to over 11,900 companies incorporated in the UK, significantly expanding the scope of carbon reporting. Businesses must comply with SECR if they meet at least two of the following criteria:

• Annual turnover exceeding £36 million
• Balance sheet total over £18 million
• More than 250 employees 

Some businesses are exempt from SECR requirements, including those consuming 40 MWh or less of energy per reporting year and small or medium-sized enterprises (SMEs) that are not public interest entities (PIEs) or subject to other regulatory frameworks. While these organisations are not legally required to report, they are encouraged to adopt best practices in energy and carbon reporting voluntarily.

What are the SECR reporting requirements?

Under SECR, companies must report the following information in their annual reports: 

• UK energy use: A breakdown of total energy consumption from electricity, gas, and transport.
• Greenhouse gas emissions: Reported in CO2e (carbon dioxide equivalent) to standardise measurements.
• Energy intensity ratio: A metric comparing emissions to business activity (e.g., tonnes of CO2e per unit of revenue). 
• Energy efficiency actions: A summary of measures taken to improve energy efficiency during the reporting year. 
• Methodologies used: An explanation of how energy use and emissions were calculated. 

For quoted companies, additional obligations include reporting on global energy use and emissions. This approach ensures that businesses provide a comprehensive overview of their environmental impact and the steps they’re taking to mitigate it. 

The importance of SECR

The SECR serves multiple functions in the UK’s broader sustainability strategy:

Enhancing transparency. By enforcing standardised reporting, SECR provides stakeholders–including investors, customers, and the general public–with clear insights into a company’s environmental impact. This transparency fosters accountability and enables informed decision-making. 

Driving energy efficiency. The framework encourages businesses to implement energy-saving measures, potentially leading to significant cost reductions. Mandatory reporting on energy efficiency actions motivates companies to identify and implement improvements across their operations. 

Supporting the UK’s net zero goals. SECR aligns with the UK’s commitment to achieving net zero emissions by 2050, playing a pivotal role in corporate sustainability efforts.

Influencing investment decisions. Standardised disclosures allow investors to integrate environmental considerations into their decision-making, incentivising capital flow toward more sustainable businesses and projects.

Encouraging innovation. As companies seek to enhance energy efficiency and reduce emissions, SECR fosters innovation in clean technology and sustainable business practices. 

SECR in the broader context 

SECR does not exist in isolation; it complements other reporting frameworks and aligns with global sustainability trends. The regulation builds upon previous UK initiatives such as the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and Mandatory Greenhouse Gas Reporting, simplifying compliance while expanding its reach. 

Internationally, SECR aligns with climate action frameworks like the Paris Agreement and the UN Sustainable Development Goals. With climate change continuing to pose significant economic risks–potentially shrinking global GDP by up to 18% by 2050–SECR places UK businesses at the forefront of corporate sustainability efforts. 

Overcoming the challenges of SECR compliance

Businesses may encounter some challenges in complying with SECR. Gathering accurate data across multiple sites and diverse operations can be complex, often requiring specialised expertise or software to ensure accuracy and consistency. Additionally, effective SECR reporting demands cross-departmental collaboration and buy-in from various leadership within the business, which can be a hurdle for some organisations.

However, these challenges are far outweighed by the opportunities that SECR presents:

• Identifying inefficiencies and optimising energy use can lower operational expenses.
• Transparent and proactive environmental reporting strengthens trust among customers, investors, and employees.
• Businesses that demonstrate strong environmental performance stand out from competitors in an increasingly sustainability-conscious market. 
• Companies that proactively align with SECR will be better positioned for upcoming carbon reporting regulations.

By adopting the right tools and strategies, businesses can turn SECR compliance into a driver of long-term value.

Best practices for SECR reporting 

To maximise the value of SECR compliance, businesses should follow these best practices: 

1. Start early.  Begin collecting and analysing data well before reporting deadlines to ensure accuracy and avoid last-minute issues.
2. Leverage technology.  Use specialised software or platforms to automate data collection, improve accuracy, and enhance reporting efficiency. 
3. Provide context. Explain year-on-year changes in energy use or emissions, particularly when anomalies occur, to add transparency and credibility.
4. Set clear reduction targets. Use SECR reporting as a foundation to establish clear, actionable sustainability goals that drive impact.
5. Seek independent verification. External audits can strengthen credibility, identify areas for improvement, and enhance stakeholder confidence.

By taking a strategic approach to SECR reporting, businesses can go beyond compliance and use it as a tool for meaningful sustainability progress.

The future of SECR

As the regulatory landscape evolves, SECR is expected to expand in scope, with potential future developments including an expanded reporting scope, greater alignment with international reporting standards, and a shift toward centralised digital platforms to improve data accessibility and analysis. 

Businesses that proactively adapt to these potential changes and embed sustainability reporting into their corporate strategy will be well-positioned for long-term success in an increasingly environmentally conscious market. 

How to comply with SECR 

If your business needs support in complying with SECR, automating data collection, or improving reporting accuracy, Zevero is here to help. Our platform simplifies carbon measurement, reduction, and reporting, enabling businesses to meet regulatory requirements while progressing toward their net zero goals.

Contact us  today to learn how we can streamline your SECR compliance and help you focus on what truly matters—both for your business and the planet.