The UK’s New Environmental Reporting Framework
Liz Minshall, environmental compliance consultant with Valpak, comments on the UK government’s new mandatory Streamlined Energy and Carbon Reporting (SECR) framework.
New environmental legislation obliges all large companies in the UK to include detailed carbon emissions and energy usage figures in their Director’s report.
The SECR framework replaces the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) whilst introducing several, significant changes.
In contrast to CRC which was a landmark piece of legislation in its time as it linked energy use to energy levels directly for the first time, the SECR framework is based on company size and includes all quoted companies, large incorporated unquoted companies, and large limited liability partnerships (LLPs).
Whilst introducing a more comprehensive reporting regime, the government has also sought to streamline the process.
Unfortunately, SECR has introduced new uncertainties for smaller companies that many not have actively measured energy and greenhouse gas emissions across all streams before.
By way of example, transport-related consumption and emissions are frequently omitted from reports submitted even by companies which report on other levels. However, under the new regime, this information becomes compulsory in all annual reports.
Energy use and greenhouse gas emissions resulting from gas and electricity use must all additionally now be included, with KPIs used declared as absolutes. Moreover, the use of an intensity ratio is also mandated which involves dividing environmental impact by metrics such as turnover or number of products produced.
Finally, figures reported should relate to a quantifiable factor, such as tonnage of Co2e per square meter of gross store area – with companies also required to include information on energy efficiency actions and reporting methodology, once they have ascertained or calculated the relevant figures.
So, notwithstanding the government’s well-intended focus on reducing carbon emissions and other aspects of corporate environmental governance, it appears to have unnecessarily complicated data collection and reporting requirements and formats, and added an even bigger burden for smaller businesses in the process.