Carbon reporting in the UK: what is required, and who reports

No statute uses the phrase “carbon reporting”.

What exists is a set of overlapping duties, each created by a different department for a different purpose, written years apart, and never designed to fit together.

SECR — Streamlined Energy and Carbon Reporting — puts emissions and energy figures into the directors’ report every year, under SI 2018/1155; the SECR hub covers it in depth.

Climate-related financial disclosures under s.414CB(2A) of the Companies Act put a narrative — governance, risks, scenarios, targets — into the strategic report; see climate-related financial disclosures.

ESOS is a four-yearly energy audit notified to the Environment Agency, not a public report at all.

UK SRS — the UK Sustainability Reporting Standards — were published by the Department for Business and Trade on 25 February 2026, and the FCA’s PS26/19 applies them to listed companies, comply or explain, from periods beginning on or after 1 January 2027.

Alongside them sits PPN 006, which makes a Carbon Reduction Plan a condition of bidding for large central government contracts — a procurement rule rather than a reporting law.

The reason this matters is not tidiness: each regime has its own scope test, using different numbers, so an organisation can be inside one and outside another on the same set of accounts.

One distinction saves a great deal of effort.

Carbon accounting is the measurement — boundary, activity data, emission factors, tonnes of CO2e — and is the same work whichever regime catches you.

Carbon reporting is what you are then required to publish, where and in what form, which is why carbon accounting software that does the arithmetic well does not by itself tell you what to disclose.

For the duties regime by regime, with enforcement and dates, see carbon reporting requirements in the UK.

Start with the part everyone agrees on: every quoted company is in SECR scope, with no size test — Schedule 7 Part 7 applies to a quoted company’s directors’ report, full stop.

“Quoted” means the Companies Act definition in s.385: the UK official list, an EEA official listing, the NYSE or Nasdaq; AIM is not in it, so an AIM company is unquoted for SECR and tested on size.

Unquoted companies are caught only if they are large, and that is where it gets interesting.

Paragraph 20B exempts an unquoted company that meets two or more of three conditions: turnover not more than £36m, balance sheet total not more than £18m, and not more than 250 employees.

So a company is in scope only if it exceeds at least two of the three.

Those figures matched the Companies Act definition of a large company when SECR was written.

They no longer do: SI 2024/1303 raised the Companies Act thresholds from 6 April 2025, so that a company is now medium-sized under s.465 if it meets two of turnover not more than £54m, balance sheet not more than £27m and not more than 250 employees (small-company limits under s.382 rose too).

The SECR table did not move.

The reason is mechanical: ¶20B(2) writes its three figures into its own table and does not cross-refer to s.465, so an uplift to s.465 cannot reach it.

Nor was it overlooked by proximity — regulation 5 of SI 2024/1303 did amend Schedule 7, removing Parts 3 and 4, and left Part 7A as it found it.

DESNZ’s post-implementation review of May 2026 restates the £36m, £18m and 250 figures, though it phrases them as “or more” thresholds rather than the statute’s “not more than” exemption; the figures are right and the statute’s shape is the one to apply.

Take a company with turnover of £40m, a balance sheet of £20m and 100 employees.

Under s.465 it meets all three conditions and is medium-sized; under ¶20B it meets only one, so the exemption fails and it is in SECR scope.

Any guidance that says “SECR applies if you are large under the Companies Act” has just told that company, wrongly, that it has nothing to file.

The checker on this panel runs your figures against the SECR test — including the two-year rule and the group test — and, optionally, against ESOS.

Nothing is sent anywhere; it runs in your browser.

Use the figures your accounts use: net turnover for the year, total assets before deducting liabilities, and the monthly average headcount.

The energy question only affects the SECR answer: at or below 40,000 kWh the disclosures may be omitted, but only if the report says so.

Read the ESOS result as “likely”: group structure, overseas parents and the qualification date all pull organisations into ESOS that a headline test would leave out, and ESOS qualification works through them.

For UK SRS, the test is a listing category rather than a size, set out in who is in scope of UK SRS.

The Energy Savings Opportunity Scheme is here because readers looking for carbon reporting are routinely inside it without knowing.

It is not a disclosure regime: it is an energy audit, carried out or reviewed by an approved lead assessor, followed by a notification to the Environment Agency.

Its scope test differs again: under Schedule 1, a large undertaking employs at least 250 people, or has turnover above £44m and a balance sheet above £38m — the two money limbs together are the alternative to headcount.

Whether you are in scope is decided on the qualification date, which regulation 4 fixes as the 31 December before the compliance date — 31 December 2026 for Phase 4.

The compliance date is 5 December 2027, but the audit needs twelve months of energy data and takes months to do, so the working deadline is well before the statutory one.

SI 2026/701, in force on 22 July 2026, changed how Phase 4 is done — display energy certificates and Green Deal assessments removed as routes, an action plan review added, the ISO 50001 route opened to total or significant (95%) consumption — and left the qualification thresholds untouched.

ESOS and SECR overlap but have never been aligned; ESOS vs SECR sets them side by side, the ESOS overview covers the scheme, and the ESOS Phase 4 compliance guide covers the cycle.

The FRC’s reviewers read a directors’ report, not an inventory, and most corrections are about what the report says.

Test scope on the right instrument, every year. Run ¶20B or ¶20C, not s.465, and remember the two-year rule in the year you cross.

Fix the boundary before collecting anything. Pick a consolidation approach, write it down, and apply it to the entities the accounts consolidate.

Do not stop at gas and electricity. The transport limb is not optional, and reimbursed business mileage lives in the expenses system rather than a meter.

Choose a ratio you can keep. One you can produce for five years is worth more than a clever one you will change.

Write a methodology note that names things — standard, edition, factor year and version, consolidation approach, estimation.

Claim the 40,000 kWh relief out loud, or not at all. A silent omission is not compliance.

Say what is missing. ¶20D(6) turns an incomplete dataset into a compliant disclosure if the report states what is not included and why.

Put the narrative where it belongs. Figures in the directors’ report; climate risks, scenarios and targets in the strategic report.

The statements on this panel are the commonest wrong versions of these rules; the SECR reporting guide takes the drafting from here.