Carbon reporting in the UK: what is required

Carbon reporting is the publication of an organisation’s greenhouse gas emissions and the energy behind them, in a form and place that law or a standard prescribes. In the UK it is not one duty. Four regimes make organisations measure and publish or notify something about energy and emissions: SECR, which puts figures in the directors’ report; statutory climate-related financial disclosures under section 414CB(2A) of the Companies Act 2006, which put a narrative in the strategic report; ESOS, a four-yearly energy audit notified to the Environment Agency; and UK SRS S1 and S2, which are published and voluntary. Each has its own scope test, so an organisation can be inside one and outside another.

Partly. SECR is mandatory for all quoted companies and for large unquoted companies and LLPs, and has been for financial years beginning on or after 1 April 2019. The climate-related financial disclosures at section 414CB(2A) are mandatory for the entities caught by the non-financial and sustainability information statement regime. ESOS is mandatory for large undertakings, though it produces an audit and a notification rather than a public report. UK SRS is not mandatory for anyone — GOV.UK describes the standards as “available for voluntary use, by any entity that chooses to do so”.

For SECR: every quoted company, with no size test at all, plus every large unquoted company and LLP. Large here means failing to meet two or more of the three exemption limbs in Schedule 7 paragraph 20B — turnover not more than £36 million, balance sheet total not more than £18 million, and not more than 250 employees. A parent is tested on its group under paragraph 20C, where the alternatives are £36m net or £43.2m gross turnover and £18m net or £21.6m gross balance sheet. A subsidiary included in a compliant parent’s group report does not report separately.

No. The Companies Act size thresholds were uplifted with effect from 6 April 2025 — a medium-sized company is now one meeting two or more of turnover not more than £54 million, balance sheet total not more than £27 million and not more than 250 employees. SECR’s test was not uplifted with it, because Schedule 7 paragraph 20B(2) writes £36m / £18m / 250 into its own table rather than cross-referring to section 465. SI 2024/1303 did amend Schedule 7 — regulation 5(3) removed paragraphs 6 and 7 and Parts 3 and 4 — and left Part 7A alone. DESNZ restated £36m / £18m / 250 in its Post-Implementation Review of 26 May 2026. The practical result is that a company can be medium-sized for its accounts and still be in SECR scope.

Streamlined Energy and Carbon Reporting, introduced by the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, SI 2018/1155. It came into force on 1 April 2019 and has effect for financial years beginning on or after that date. It works by inserting Part 7A into Schedule 7 of SI 2008/410 for unquoted companies and Part 5A into SI 2008/1913 for LLPs, and by amending the pre-existing Part 7 for quoted companies. It requires emissions, energy, a methodology statement, at least one intensity ratio and prior-year comparatives in a statutory report you already file.

For a quoted company: global Scope 1 emissions (paragraph 15(2)), global Scope 2 from purchased electricity, heat, steam or cooling (15(3)), the aggregate energy in kWh (15(3A)), the methodologies used (16), at least one intensity ratio (17) and the previous year’s figures (18). For a large unquoted company or LLP: emissions from the combustion of gas and from fuel consumed for transport (20D(1)), emissions from purchased electricity (20D(2)), the aggregate energy in kWh (20D(3)), a description of principal energy-efficiency measures if any were taken (20D(4)), the methodologies (20F), at least one intensity ratio (20G) and comparatives (20H) — on a UK boundary.

For quoted companies, no. For large unquoted companies and LLPs, partly yes — and the flat claim that Scope 3 is never required under SECR is false for them. Paragraph 20D(1)(b) requires emissions from “the consumption of fuel for the purposes of transport”, and the Defra and BEIS Environmental Reporting Guidelines of March 2019 read that as covering fuel used in personal and hire cars on business use, including fuel for which the organisation reimburses employees following claims for business mileage. That is the element conventionally classified as Scope 3 which cannot be left out. Everything else in Scope 3 is voluntary, though strongly encouraged.

Paragraph 20D(7)(a) removes the energy and carbon disclosure requirement where a company consumed 40,000 kWh of energy or less in the United Kingdom during the reporting period. The March 2019 guidance states the same quantity as “40MWh or less”. The exemption is not self-executing: the paragraph requires that “the report states that the information is not disclosed for that reason”, so simply leaving the figures out is not compliance. A separate limb at 20D(7)(b) covers information that would be seriously prejudicial to the company’s interests, and the two are often conflated.

There is no SECR-specific penalty. Neither SI 2018/1155 nor Schedule 7 Part 7A creates a fine, a penalty or an enforcement power. A directors’ report missing its energy and carbon content is a defective report, and the consequences come from the Companies Act 2006: the FRC may raise an enquiry through Corporate Reporting Review, acting as the authorised person under SI 2008/623; section 456 allows a court to order a revised report and can put the costs on the directors who approved the original; and section 419(3) creates an offence for a director who knew the report did not comply or was reckless about it. The Act states no figure for the fine. Section 463 is often listed as a penalty and is the opposite — it limits liability to the company and bars third-party reliance claims outright.

Carbon accounting is the measurement: drawing an organisational boundary, choosing a consolidation approach, collecting activity data, applying emission factors and arriving at a figure in tonnes of CO₂e. Carbon reporting is what you are then required to publish, where and in what form. The measurement work is broadly the same whichever regime catches you; the reporting obligations differ sharply between them. A tool that does the arithmetic well does not by itself tell you what you must disclose.

Approximately 19,900 quoted companies, large unquoted companies and large LLPs are in SECR scope, according to DESNZ analysis published in the independent evaluation of SECR on 29 January 2026. That is 76% more than the 11,300 the 2018 impact assessment forecast, a gap the 2026 Post-Implementation Review states directly. Figures in the range of 11,900 circulate widely and appear in no government document.

DESNZ’s 2026 Post-Implementation Review puts SECR’s total ongoing mean cost to compliers at £7,100 per year, combining internal staff time of around 94 hours with external costs incurred by 56% of compliers. The original impact assessment had predicted £2,300. Set against that, the evaluation monetised benefits at £8.1bn across 2020–2025 against costs of £3.0bn across 2019–2025, a benefit–cost ratio of 2.72.

Two different things get called this, and the distinction matters. A regulatory framework is the set of legal duties that apply to you — in the UK, SECR, statutory climate disclosures, ESOS and potentially UK SRS. A methodological framework is the standard you calculate to, which for almost all UK reporters is the GHG Protocol Corporate Accounting and Reporting Standard, applied with the UK Government conversion factors. The statute tells you to state which methodology you used and does not tell you which to pick.

The UK Government GHG Conversion Factors for company reporting, published by the Department for Energy Security and Net Zero. The 2026 set was published on 11 June 2026 and last updated on 31 July 2026, and it is the current set. Two habits to avoid: calling them “BEIS conversion factors”, since BEIS no longer owns them, and citing only the year, since the spreadsheets are sometimes revised mid-year — name the version date in your methodology note.

Yes, if they are large. The duty is the same in substance as the one on large unquoted companies, but it arrives through a different instrument: SI 2018/1155 regulation 10 inserted Part 5A into SI 2008/1913, which applies modified versions of the Companies Act provisions to LLPs. The document is called an Energy and Carbon Report rather than a directors’ report. LLPs are also one of the two populations where DESNZ found non-compliance concentrated.

Whichever one you can defend and keep. Paragraph 20G requires the report to “state at least one ratio which expresses the company’s annual emissions in relation to a quantifiable factor associated with the company’s activities”, and the statute prescribes nothing further. Common choices are tonnes of CO₂e per £million of turnover, per full-time-equivalent employee, per square metre of floor area or per unit produced. The DESNZ evaluation names heterogeneous intensity metrics as a reason comparability across SECR reports is poor — which is an argument for choosing one and holding it for years, not for changing to whatever flatters the current period.

They share almost nothing but the subject. ESOS is a four-yearly energy audit carried out or signed off by an approved lead assessor and notified to the Environment Agency; SECR is an annual disclosure in a statutory report. Their scope tests are different: ESOS catches an undertaking that either employs at least 250 persons, or has turnover over £44 million and a balance sheet total over £38 million; SECR exempts an unquoted company meeting two or more of £36m, £18m and 250. Threshold alignment between them has been discussed for years and has not happened; SI 2026/701 changed how ESOS assessments are done in 2026 and left the thresholds untouched.

Not as things stand. UK SRS S1 and S2 are voluntary, and no instrument repeals or amends SECR in consequence of their publication. The 2026 Post-Implementation Review recommends retaining SECR with amendments rather than replacing it, and names alignment with ISSB, CSRD and TCFD-aligned frameworks as one of five candidate areas for a consultation that has not yet opened. Anyone telling you SECR is about to disappear is describing a possibility, not a decision.

No date has been set, and no rule has been made. The FCA consulted through CP26/5 on requiring listed issuers to report against UK SRS S2 for accounting periods beginning on or after 1 January 2027. That consultation closed on 20 March 2026 and as at 19 August 2026 no policy statement answering it had been published. The FCA’s own page, last updated 5 June 2026, says it aims to publish one in autumn 2026, “subject to the final UK SRS”. UKLR 6.6.6R still asks listed companies for a statement about consistency with the TCFD recommendations.

Not under SECR, and not under the statutory climate disclosure regime. But two qualifications matter. First, the test that decides this is paragraph 20B, not the Companies Act size test, and since April 2025 they no longer agree — a company can be medium-sized for its accounts and in scope for SECR. Second, a small company can still find itself asked for emissions data contractually, by a customer inside one of these regimes who needs it for their own Scope 3 reporting. That is a commercial requirement rather than a legal one, and it is increasingly common.

The SECR figures go in the directors’ report — or, for an LLP, in a separate Energy and Carbon Report. The climate-related narrative required by section 414CB(2A) goes in the strategic report, inside the non-financial and sustainability information statement. They are two statutory homes and two different duties, and reports that merge them into a single sustainability section tend to lose one of the required elements in the merge.

Paragraph 20D(6) is the provision for this, and it is more generous than most people expect. The duties apply “only to the extent that it is practical for the company to obtain the information in question” — but where it is not practical, “the report must state what information is not included and why”. An explained gap is a compliant disclosure. An unexplained one is not, and it is the kind of thing a Corporate Reporting Review enquiry picks up.