Streamlined Energy and Carbon Reporting- Common mistakes

Streamlined Energy and Carbon Reporting- Common mistakes

Streamlined Energy and Carbon Reporting require the companies that qualify to report on their UK energy use, and the associated greenhouse gas emissions produced. To ensure that your business has the necessary data available to it once it is time to produce your SECR report, there are a few common mistakes to be avoided.

What is SECR?

SECR stands for Streamlined Energy and Carbon Reporting, and is a mandatory UK government framework that replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme in April 2019. It was introduced by the government to simplify carbon and greenhouse gas reporting, reducing the administrative burden for companies.

Companies that meet the eligibility criteria for SECR must submit a report in their Directors’ Report. SECR applies for financial years beginning on or after 1st April 2019. The qualification criteria are detailed below:

Qualification Criteria

  • Quoted companies of any size that are required to prepare a Directors’ Report
  • UK registered, unquoted large companies as defined in the Companies Act 2006. This refers to companies that fulfil at least two of the following three conditions in the financial year for which they are reporting:
  1. At least 250 employees;
  2. An annual turnover of £36m or more; and/or
  • An annual balance sheet total greater than £18m

What do you report for SECR?

Those companies that qualify for SECR will need to report on their UK energy use, and the associated greenhouse gas emissions produced. These typically cover gas and electric usage in buildings owned and/or operated by the company, and transport associated with the operations of the company.

Exactly what you are required to report on differs depending on the type of company.

Principles for accounting and reporting environmental impacts

The Environmental Reporting Guidelines, issued by the UK determines a variety of principles to adhere to when accounting and reporting on the environmental impacts of your business:

  • Relevant: ensure the data you collect and report appropriately reflects the environmental impacts of your organisation
  • Quantitative: Ensure any KPIs developed from the data are measurable. Quantitative information should be accompanied by a narrative, explaining its purpose, impacts and giving comparators where appropriate
  • Accuracy: reduce uncertainties in your figures where practical
  • Completeness: quantify and report on all sources of environmental impact within the reporting boundary you have defined. Disclose and justify any specific exclusions
  • Consistent: use consistent methodologies to allow for meaningful comparisons of environmental impact data over time
  • Comparable: companies should report using accepted KPIs rather than organisations inventing their own versions of potentially standard indicators
  • Transparent: address all relevant issues in a factual and coherent manner, keeping a record of assumptions, calculations and methodologies used

SECR reporting mistakes

The mistakes that can arise from SECR reports fail to adequately adhere to these principles; examples of these are given below:

  • Relevant: excluding grey fleet usage because the vehicle is not owned by the organisation, despite the travel being for business purposes
  • Quantitative: providing descriptions of energy use rather than actual figures
  • Accuracy: purposefully being inaccurate in order to paint your organisation in a better light
  • Completeness: Excluding something (even on an accepted basis) but not disclosing or justifying the exclusion is not acceptable
  • Consistent: changing methodologies to allow for ‘creative accounting’
  • Comparable: choosing a KPI that is not widely used in the sector, or having an internal definition of such a KPI that benefits the figures
  • Transparent: purposely not stating relevant information, such as the methodology used

Whilst mistakes do happen, minimising these and preventing purposeful ‘mistakes’ ensures that the SECR report for your organisation is a useful tool to keep track of your environmental impacts. Doing it right ensures any measures your organisation takes to mitigate these impacts are accurately reflected year-on-year, demonstrating to employees and the public alike your green credentials.

Want to find out more?

Find out more about Streamlined Energy and Carbon Reporting including our Self-Service SECR where you can learn how to complete your own SECR report! 

Article published 14/04/22

Elmhurst Energy Services Ltd. 16, St Johns Business Park, Lutterworth, Leicestershire, LE17 4HB

© Elmhurst Energy Services Ltd 2022. All rights reserved. Elmhurst Energy Services Limited is registered in England, Company Number: 06087105