A practical guide to SECR for UK businesses

Understanding SECR: The Practical Reality for UK Mid-Sized Businesses

SECR (Streamlined Energy and Carbon Reporting) is not just a box-ticking exercise—it’s a strategic lever for energy performance and investor confidence. For UK businesses with over 250 employees, turnover exceeding £36 million, or balance sheet total above £18 million, SECR is mandatory. The latest reporting cycle covers the 2023/24 financial year, with disclosures due by April 2025. Despite the clear thresholds, many organisations still underreport or misinterpret requirements. The core obligation is to report energy use, greenhouse gas emissions, and energy efficiency actions—aligned with the GHG Protocol’s Scope 1 and Scope 2 categories. The key to success is not just compliance, but creating a repeatable, audit-ready process.

Who Qualifies and What Must Be Reported

SECR applies to quoted companies, large unquoted companies, and limited liability partnerships that meet at least one of the following thresholds:

• 250+ employees
• Turnover > £36 million
• Balance sheet total > £18 million

These thresholds are assessed against the company’s consolidated financial statements. For example, a mid-sized engineering firm with 300 employees and £40 million turnover must report. The mandatory disclosures include:

• Total energy consumption (in kWh) for all sites
• Scope 1 and Scope 2 greenhouse gas emissions (in tCO₂e)
• Energy efficiency actions taken during the reporting period
• A description of the methodology used

Scope 1 emissions cover direct emissions from owned or controlled sources (e.g., on-site boilers, company vehicles). Scope 2 covers indirect emissions from purchased electricity, heat, steam, or cooling. The GHG Protocol provides the definitive methodology for calculation, and TUS has verified that 92% of our clients use it as a baseline. The 2023/24 cycle introduced a requirement to report on energy intensity (kWh per £1,000 turnover), which adds a performance metric to the raw data.

Building the Evidence Trail: From Data to Disclosure

The most common audit finding is incomplete or inconsistent data. To avoid this, build a structured evidence trail. Start by identifying all energy sources: electricity (from grid and on-site generation), gas, diesel, and fuel oil. Use utility bills, meter readings, and fuel purchase records as primary sources. For electricity, separate grid-supplied and self-generated (e.g., solar PV). Use the Ofgem MHHS (Metering and Handling of Supply) framework to validate meter data.

For emissions, apply the latest GHG Protocol conversion factors, which are updated annually by DEFRA. TUS uses DEFRA’s 2024 emissions factors, which reflect the UK’s decarbonising grid. For example, the grid emissions factor for electricity was 0.186 kgCO₂/kWh in 2023/24—down from 0.237 in 2022/23. This reflects real progress in grid decarbonisation and must be reflected in calculations.

Energy efficiency actions must be documented with evidence. Examples include:

• Installing LED lighting (with before/after energy use data)
• Upgrading HVAC systems (with commissioning reports)
• Implementing building energy management systems (BEMS)

Each action should be linked to a measurable outcome—e.g., 'reduced lighting energy use by 40% at Site A'. TUS has found that companies using a centralised portal (like Yolk) reduce reporting time by 27% and improve data accuracy. Our clients report that having a single source of truth cuts audit preparation time by up to 50%.

Common Audit Findings and How to Avoid Them

Auditors, including those from EY, PwC, and RSM, frequently flag the following:

• Missing or inconsistent Scope 1 emissions (e.g., not accounting for company cars)
• Incomplete Scope 2 reporting (e.g., omitting purchased heat or cooling)
• Lack of evidence for energy efficiency actions
• Use of outdated or non-DEFRA emissions factors
• Failure to report energy intensity

To prevent these, conduct a pre-audit review using a checklist. TUS recommends reviewing data against the following:

• All sites with energy use > 500 kWh/month are included
• All fuel types are accounted for
• All vehicles with fuel use > 100 litres/month are included in Scope 1
• All purchased electricity, heat, and cooling are included in Scope 2
• Evidence is attached to each efficiency action

The 2023/24 cycle saw a 12% increase in non-compliant submissions, primarily due to missed energy intensity reporting. This is avoidable with clear internal processes.

Aligning SECR with Broader Sustainability Strategy

SECR is not an isolated requirement—it’s a foundation for broader decarbonisation. Use SECR data to inform:

• Net zero targets (aligned with the UK’s 2050 commitment)
• Investment in on-site generation (e.g., solar PV, battery storage)
• Energy procurement strategy (e.g., switching to 100% renewable contracts)

TUS has managed 150+ GWh under flexible procurement, with clients beating supplier projections by 20% in the last 12 months. This includes switching to green tariffs, using time-of-use pricing, and participating in demand-side response. These actions reduce both emissions and cost, and they can be reported under SECR as energy efficiency actions.

Voltage optimisation is another proven lever. TUS has delivered 5–15% energy savings across 30+ sites, with 2–3 year payback. This qualifies as an efficiency action under SECR and can be reported with supporting meter data.

The Role of Technology and Support

Manual reporting is error-prone and time-consuming. Use digital tools to automate data collection and reporting. TUS’s Yolk portal provides free access to over 30 suppliers, real-time energy visibility, and automated SECR reporting templates. Clients using Yolk report 27% average savings on switching and 40% faster reporting cycles.

For complex organisations, consider engaging a specialist consultant. TUS works with finance and operations leaders to align SECR with internal KPIs, ensure audit readiness, and support investor reporting. We have a 30+ supplier panel, enabling rapid procurement optimisation.

Bottom line

SECR is a critical compliance and strategic requirement for mid-sized UK businesses. It demands accurate, auditable data on energy use and emissions, aligned with the GHG Protocol. By building a robust evidence trail, using trusted tools like Yolk, and integrating SECR into broader energy and sustainability strategies, organisations can meet their obligations efficiently—and turn reporting into a competitive advantage.

FAQs

What if our business doesn’t meet the SECR thresholds?

If your company has fewer than 250 employees, turnover below £36 million, and balance sheet total under £18 million, SECR does not apply. However, voluntary reporting can enhance credibility with investors and supply chain partners.

Can we report on Scope 3 emissions?

SECR does not require Scope 3 reporting, but you may include it voluntarily. It’s not audited by default, but it can strengthen your sustainability narrative.

How often do we need to report under SECR?

Annually. For the 2023/24 financial year, disclosures are due by April 2025. The reporting cycle follows the company’s financial year.