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Is carbon reporting set to become simpler?

While the Carbon Reduction Commitment (CRC) energy efficiency scheme was established with good intentions, many businesses found it complex to achieve compliance. These organisations will welcome the new, simpler reporting framework that the Government has proposed to replace the CRC.

The Government has confirmed that once the CRC ends later this year, most large businesses will need to continue to report their CO2 emissions. Full guidance on compliance with the new Streamlined Energy and Carbon Reporting (SECR) framework was released in January.

Here’s what we know…


Who will need to comply with the SECR?

The SECR will apply to all quoted companies (those whose shares are listed on the stock exchange) and large UK companies with over 250 employees or annual turnover of more than £36m and an annual balance sheet of over £18m.

Public sector organisations are exempt from SECR, and private companies that can provide evidence that they use less than 40,000kWh in a year will not be required to comply. These criteria will increase the number of organisations that are required to measure and report on their carbon emissions, as around 5,200 organisations currently comply with the CRC, while approximately 11,900 companies will be required to report under SECR.


What will businesses be required to report?

Quoted companies already report on their global emissions and emissions intensity under the mandatory greenhouse gas (GHG) scheme, which will continue. In addition they will also need to report on their global energy usage, including other Scope 1 sources (like refrigerants), and provide an intensity metric to demonstrate whether their energy usage has changed year on year due to increased growth or decreased energy efficiency.

Large, unquoted companies will be required to report their UK energy use, the associated Scope 1 and 2 emissions and an intensity metric. They will need to include electricity, gas and transport as a minimum within their energy use calculation.

Both quoted and unquoted companies must report on any energy efficiency measures they have implemented within the year, but they will not be obliged to disclose their ESOS recommendations and how they have acted on them (although this may change in the future). Scope 3 emissions – indirect emissions caused by the activities of an organisation, such as emissions from employee commuting or waste disposal – will be voluntary for all eligible organisations.


How will businesses report on their emissions?

In an effort to reduce the administrative burden of compliance on businesses, the Government has decided that reporting will be done through each company’s own annual reports. Electronic reporting to a central database will not be required from the outset, but this may become mandatory in the future.


What do eligible organisations need to do now?

If your organisation is required to comply with the CRC, you will need to continue with your current obligations for the remaining year of CRC. The last CRC submission, covering April 2018 to March 2019 will need to be made by the end of July 2019. We know that CRC compliance can be complicated, so our industry experts are on hand to manage the process from end-to-end – click here to find out more.

While the SECR is intended to make reporting easier for businesses, it’s still likely to take a fair amount of time and resources to achieve compliance. If your organisation hasn’t previously been required to report on your carbon emissions, the new scheme may seem daunting, but it doesn’t have to be!

Our compliance team have years of experience in helping businesses to meet the requirements of various pieces of energy legislation, and with their support, compliance can be hassle-free for your team. Get in touch with them today by calling 08451 46 36 26 or email