19/07/2018 UPDATE: Large UK companies required to report energy use and CO2 emissions
As of April 2019, companies with more than 250 employees, an annual turnover of £36+ million, or an annual balance sheet of £18+ million will have to share information about their energy use. This also includes data on their carbon emissions and any energy efficiency measures put in place within the company. The scheme is all about streamlining energy and carbon reporting within the corporate industry, and to further help consumers realise the connection between reduced consumption, reduced bills, and a reduced carbon footprint.
The requirements fall under the new Streamlined Energy and Carbon Reporting (SECR) framework, which has now replaced the CRC Energy Efficiency Scheme detailed in the article below. The government hope that the SECR framework will improve energy efficiency by 20% by 2030, and are pushing the reporting requirements out to 11,900 UK businesses, rather than the 1,200 covered by the previous CRC framework. The businesses must publicly share their SECR information unless it is believed that revealing it would be “seriously prejudicial” to the company. Also exempt from sharing data are companies who can prove that they use under 40,000kWh in a year.
The government stated in their consultation outcome that streamlined energy and carbon reporting (SECR) should build upon the existing mandatory Energy Savings Opportunity Scheme (ESOS) and greenhouse gas emissions reporting by UK eligible companies. Organisations caught under the ESOS regulations are now conducting audits to identify their cost-effective energy efficiency opportunities for ESOS Phase 2. Some are moving forward with implementing ISO 50001.
Our lead assessors can help you to complete ESOS phase 2 before the ultimate deadline of 5th December 2019. If you have successfully completed ESOS Phases 1 and 2, but need help tying them with the SECR reporting, contact our sustainability team at David.Carlyon@monarchpartnership.co.uk.
Streamlined Energy and Carbon Reporting: Emerging Obligations and Opportunities for Large Organisations
Originally published 18/12/2017 by David Carlyon
What are the Plans for Replacing the CRC Energy Efficiency Scheme?
In October, the Department for Business, Energy and Industrial Strategy (BEIS) released five consultations in relation to energy management, including the open consultation: ‘Streamlined energy and carbon reporting’. This follows the announcement of the UK government in March 2016 that the CRC Energy Efficiency Scheme (CRC) would be abolished after the 2018-2019 compliance year, alongside the commitment to consult on a simplified energy and carbon reporting framework for introduction by April 2019.
While the revenue aspects of the CRC will be compensated for through increases in the rates of the Climate Change Levy (CCL), it has been uncertain as to what will replace the reporting elements of the legislation. It is the intention that the simplified energy and carbon reporting framework will be UK-wide, with proposals being implemented through the Companies Act 2006.
The crucial elements addressed in the consultation focus on the type of companies that are required to report under the emerging scheme, alongside the environmental scopes of reporting.
What are the Options for the New Scheme?
The consultation therefore proposes a number of reporting requirements with differing responsibilities depending on the size and energy consumption of organisations.
Option 1 – where no new reporting policy is implemented.
Option 2 – all companies using over 6GWh of electricity per year through settled half hourly meters, (excluding CCA and EU ETS supplies) to report on their electricity, gas and transport energy use and emissions and an intensity metric (with a global scope for energy and emission for quoted companies) in their annual reports.
Option 3 – a variation of Option 2, where reporting requirements for participants are the same as in Option 2, but the scope of the scheme is all ‘large’ companies.
Option 4 – the same as Option 3, but with an additional requirement for participants to report on their energy efficiency opportunities and progress against them.
What Constitutes a ‘Large’ Company?
While companies listed on the UK Stock Exchange are already required to report on emissions, the obligations for un-quoted companies are less clear. The compliance threshold will therefore be dependent on whether the government opts for the definition of a ‘large’ company as prescribed by the Companies Act 2006:
- More than 250 employees, or
- Annual turnover greater than £36m, or
- Annual balance sheet total greater than £18m
Or the definition provided under ESOS:
- An average of 250 or more employees in a certain 12-month period
- Annual turnover greater than €50m
- Annual balance sheet total in excess of €43m
What are the Next Steps?
While the current details make it difficult to draw any precise conclusions, it is likely that the upcoming actions will result in an increase in the number of organisations required to report on energy consumption and CO2 emissions. Companies with existing obligations under the CRC and those that may potentially qualify due to their size or energy usage should monitor developments closely.
Get in touch with our Sustainability Team to discuss your carbon reporting requirements and sustainability opportunities.
The consultation closes on 4 January 2018.
To make sure you have collected all relevant data for the Streamlined Energy and Carbon Reporting, and that it is accurate, use our Smart Asset Management solution.