New energy reporting legislation places new requirements on business

New environmental legislation will oblige all large companies in the UK to include detailed carbon emissions and energy usage figures in their Director’s report.

The new framework (Streamlined Energy and Carbon Reporting – SECR) came into force in April.

It replaces the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) and incorporates several significant changes.

Liz Minshall, Environmental Compliance Consultant at Valpak, said: “CRC was a landmark piece of legislation, which addressed energy use for the first time. Where CRC applied directly to energy levels, the SECR is based on company size. It has expanded to include all quoted companies, large incorporated unquoted companies, and large limited liability partnerships (LLPs). The aim was to make the process more streamlined, but we have found that many of the smaller companies that Valpak works with are unclear – or unaware – of their obligation.

“Particularly at the smaller end of the scale, when we work with businesses, we find they are not actively measuring energy and greenhouse gas emissions across all streams. Transport is commonly left out, even among companies that report on some level. However, under the new ruling, this information will become a compulsory section in all annual reports.

Energy use and greenhouse gas emissions resulting from gas and electricity use and transport must all be included. Any KPIs used should be given as absolutes, and use of an intensity ratio is required. This involves dividing the impact by metrics such as turnover or number of products produced. The figures should relate to a quantifiable factor, such as tonnes of Co2e per square meter of gross store area. Once levels have been ascertained, companies must then include information on energy efficiency actions and reporting methodology.

Liz Minshall concluded: “The new ruling will, rightly, turn attentions towards carbon emissions and promote environmental behaviour but, for many companies, the process can be daunting. Collecting information and presenting it altogether, in the correct format, can be time-consuming and complicated. Businesses should remember that there is help available, and with the right support, it is easily achievable.”