UK Government publishes response to its consultation on a streamlined approach to energy and carbon reporting

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24 Jul, 2018

The Department for Business, Energy and Industrial Strategy (BEIS) has published a response to its consultation which proposed a “streamlined and more effective energy and carbon reporting framework” for the UK.

A summary of the proposals, included within its October 2017 consultation, split between quoted and unquoted companies, can be found in our previous news item here

The Government proposes that:

  • The new Streamlined Energy and Carbon Reporting (SECR) proposals will apply throughout the UK and the proposed vehicle for reporting is company accounts.
  • In line with a majority of respondents’ views, reporting under the framework will form part of the Annual Report. Specifically, reporting will form part of the Directors’ report, in line with current mandatory reporting on greenhouse gases for quoted companies .
  • Where subsidiaries which qualify for SECR in their own right are part of a group, and are included in their parent’s group report, they will not be required to report separately although may do on a voluntary basis.
  • The reporting framework will apply to all quoted companies and large UK incorporated unquoted companies (including LLPs) with at least 250 employees or annual turnover greater than £36m and balance sheet total (gross assets) greater than £18m. The existing Companies Act definition of ‘large’ will be used. However those companies that fall within scope but are very low energy users will not be required to disclose SECR information if they can confirm they used 40,000kWh, or less, in the 12 month period.
  • Large Limited Liability Partnerships (LLPs) will be required to report SECR information in the Annual Reports, through an equivalent to a Directors’ report.
  • Quoted companies will continue to be required, where practical, to disclose scope 1&2 greenhouse gas emissions methodology (scope 3 will remain voluntary) and an intensity metric in their annual reports. Additionally, they will be required, where practical, to report on global energy use. Where Directors consider disclosure to be seriously prejudicial, they will be able to use such an exemption from disclosure but only in exceptional circumstances.
  • Unquoted companies will also be required, where practical, to report their UK energy use and associated scope 1 and 2 emissions and an intensity metric. Further, energy use in scope for unquoted companies as a minimum will include electricity, gas and transport. The Government also proposes that large unquoted companies should also include intensity metrics in their reporting.

The framework is expected to be put in place from April 2019.

The full set of Government proposals and a final impact assessment can be found on the BEIS website here.  The final regulations which implement these proposals are available here.  Guidance to help companies implement the requirements is available here.

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