What is SECR and how does it relate to carbon footprint reporting?
From April 1, 2019, compliance with the Carbon Reduction Commitment (CRC) and SECR, which replaced the Energy Efficiency Scheme, became mandatory. The law requires approximately 11,900 companies incorporated in the UK to report their energy and carbon emissions. This is a significant increase from the CRC requirement of 900.
SECR complements many existing regulations, including:
- Mandatory Greenhouse Gas (GHG) Reporting for Public Companies
- Energy Saving Opportunity Scheme (ESOS)
- Climate Change Agreement (CCA) Scheme
- EU emissions trading scheme
What is the purpose of SECR?
SECR was introduced to maximize the benefits of carbon and energy reporting by targeting more businesses. The reporting framework is designed to encourage companies to implement energy efficiency initiatives to reduce costs, increase productivity and reduce carbon emissions, thereby combating climate change. rice field.
SECR works closely with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (more commonly known by the acronym SFDR). The scheme was intended by G20 countries as a means of providing critical information to investors and other financial stakeholders to support negotiations on the transition to a sustainable low-carbon economy.
Who Must Comply with the SECR Framework?
Businesses must comply unless exempt. For example, all listed companies that are currently required to declare their GHG emissions regardless of size, and unquoted UK companies meeting the ‘large’ threshold set by the Companies Act 2006, Subject to additional reporting requirements as follows: It’s a “big” limited liability partnership
This requirement stipulates that companies must comply with reporting if they meet any two of the following criteria:
- revenue of over £36 million,
- £18m financial balance sheet,
- Over 250 employees.
Interestingly, public sector bodies are exempt from the new requirements, but are still subject to current legislation that requires them to disclose their carbon emissions. It is especially important to note that charities, non-profit organizations and other public institutions (universities, academies, NHS trusts, etc.) will have to determine if they meet the above requirements.
Also worth noting is that private sector companies not covered by the new standard are “strongly encouraged” to self-assess.
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