What is Streamlined Energy and Carbon Reporting (SECR)
The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 state that the new Streamlined Energy and Carbon Reporting proposals will apply throughout the UK and take effect from 1st April 2019. It will cover financial reporting years starting on, or after this date.
This replaces the guidance on Mandatory Greenhouse Gas Reporting (MGHG). The first reports will be published in 2020 for companies with FY 1st April 2019 to 31st March 2020.
Who does SECR apply to?*
Four groups of businesses will need to comply with the new reporting requirements:
1 Quoted companies as defined in section 385 of the Companies Act 2006
2 UK registered, unquoted large companies as defined in the Companies Act 2006. This refers to companies that fulfil at least two of the following conditions, three in the financial year for which they are reporting:
- at least 250 employees;
- an annual turnover greater than £36m; and/or
- an annual balance sheet total greater than £18m.
3 Large Limited Liability Partnerships (LLPs) that would already be obligated to carry out energy audits under the requirements of the ESOS Regulations.
4 Large unregistered companies that operate for gain and currently have to produce Directors’ Reports under the Unregistered Companies Regulations 2009.
* Please note exemptions apply and the definition of large company differs from the ESOS EU definition.
What does a qualifying company need to do?
Qualifying companies will need to report in line with the SECR framework* in their Directors’ Report or equivalent section contained within their annual report for financial years beginning on or after 1st April 2019.
Electronic reporting for SECR will currently be voluntary from 2019, as it is currently not mandatory for Directors’ Reports to be submitted electronically.
* Please note different types of organisation have different data reporting requirements.
What if I don’t comply?
The Conduct Committee of the Financial Reporting Council has the power to enquire into cases where it appears that relevant disclosures have not been provided. The Committee also has the power to apply to the Court, under section 456 of the Act, for a declaration that the annual report or accounts of a company do not comply with the requirements and for an order requiring the directors to prepare a revised report and/or set of accounts. Companies House does not accept accounts that do not meet the requirements of the Companies Act, and as such, late filing penalty regime will apply to accounts that omit SECR data.
The information provided by the author is intended for guidance only and companies should consult either the SECR Guidance or the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 before committing to a plan of action.