Compliance Framework
SECR Compliance: What UK Companies Must Do (2026)
Complete guide to Streamlined Energy and Carbon Reporting compliance covering qualifying thresholds, energy and emissions disclosures, methodology, de minimis exemption and FRC enforcement.
SECR Compliance Overview
1 Streamlined Energy and Carbon Reporting (SECR) requires qualifying UK companies and LLPs to disclose annual energy use, Scope 1 and 2 greenhouse gas emissions, an intensity metric and energy efficiency actions inside statutory annual filings.
Introduced by 2 the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, SECR replaced the CRC Energy Efficiency Scheme and brought roughly 12,000 UK organisations into mandatory energy and carbon reporting.
Disclosures appear in the Directors' Report (companies) or a standalone Energy and Carbon Report (LLPs) and sit alongside the broader UK sustainability reporting framework moving toward UK SRS S1 and S2.
Who Must Comply With SECR
3 SECR applies to three categories of UK organisation defined by reference to sections 465 and 466 of the Companies Act 2006: all quoted companies, large unquoted UK-incorporated companies and large LLPs.
Large unquoted companies and LLPs qualify where they meet two or more of the following in the financial year:
• Turnover of £36 million or more
• Balance sheet total of £18 million or more
• 250 employees or more
Quoted companies (Main Market, EEA-listed, NYSE or NASDAQ) must comply regardless of size and report on global Scope 1 and 2 emissions, while large unquoted companies and LLPs report UK-associated energy and emissions. Note these tests are not the same as the qualification rules under ESOS requirements.
UK organisations in scope
Approximate number of quoted companies, large unquoted companies and large LLPs required to file SECR disclosures each year under the 2018 Regulations
Group Reporting
A UK parent that meets the thresholds at group level must include SECR information in the group Directors' Report, even where the parent on its own would not qualify. Energy and emissions from group members that are not themselves in scope can be excluded, which means a parent may still be able to claim the low energy user exemption if combined consumption sits below 40 MWh.
What Must Be Disclosed
SECR disclosures cover four core elements: energy consumption, greenhouse gas emissions, an intensity metric and a narrative on efficiency actions. Methodology and prior-year comparatives must also be presented to support comparability over time.
Energy use (kWh):
• Purchased electricity
• Gas combusted on site
• Transport fuel for business operations
Greenhouse gas emissions (tCO2e):
• Scope 1 — direct emissions from combustion of fuel and operation of facilities and vehicles
• Scope 2 — indirect emissions from purchased electricity, heat and steam
• Scope 3 — voluntary but encouraged; aligns with future GHG Protocol based disclosures
Intensity ratio: At least one ratio expressing emissions relative to a business activity (revenue, employees, floor area or production output) is mandatory. Energy efficiency narrative: A non-boilerplate description of principal measures taken in the reporting period.
Where SECR Information Appears
4 Companies must include SECR information inside the statutory Directors' Report. LLPs prepare a standalone Energy and Carbon Report filed with their annual accounts.
Where energy and carbon performance is treated as strategically material, disclosures may instead be placed in the Strategic Report, with a clear cross-reference in the Directors' Report explaining the placement.
Because SECR sits inside statutory accounts, the disclosures form part of the audit and regulatory filing process: a deficient SECR section can render the wider accounts non-compliant under the Companies Act 2006.
SECR Methodology
5 SECR calculations should use the UK Government greenhouse gas conversion factors published annually by DESNZ (formerly BEIS/Defra). For 2025/26 reporting, the June 2025 factor set applies.
Recommended methodology stack:
• GHG Protocol Corporate Standard for reporting boundary and consolidation approach
• UK Government conversion factors for activity-to-emissions conversion
• Location-based method as the primary Scope 2 figure, with market-based optional
• Operational or financial control consolidation approach, applied consistently
Methodology must be disclosed in the report. Year-on-year changes in factors — including a 15% reduction in the UK electricity factor between 2024 and 2025 — can materially shift Scope 2 figures even where consumption is flat, so commentary on methodology changes is now expected practice. See carbon reporting software for tooling that supports the latest factor set.
Comply or Explain
SECR operates a comply-or-explain principle: where the disclosure of specific information is not practical or would be seriously prejudicial, the company may omit it provided the omission and reasoning are explicitly stated. This does not extend to wholesale non-disclosure of energy use or Scope 1 and 2 emissions, which remain mandatory.
De Minimis Exemption
6 A statutory de minimis exemption is available to quoted and large unquoted companies and LLPs whose total energy consumption across the reporting period is 40 MWh (40,000 kWh) or less.
Even where the exemption applies, the company or LLP must include a statement in the Directors' Report or Energy and Carbon Report confirming low energy user status. Silently omitting a SECR section is not compliant.
For group reports the 40 MWh threshold is assessed across the parent and all consolidated subsidiaries combined. Many UK holding companies of overseas groups use this route where their UK footprint is genuinely minimal.
Low energy user threshold
Annual energy consumption ceiling below which quoted and large unquoted companies and LLPs can claim the SECR de minimis exemption, equivalent to roughly 14 average UK homes
Penalties and Enforcement
7 SECR enforcement sits with the Financial Reporting Council's Conduct Committee, which monitors compliance with Companies Act 2006 reporting requirements. The Conduct Committee can launch investigations into inadequate disclosures and apply to court for a declaration requiring revised accounts.
Because SECR information forms part of the statutory annual report and accounts, non-compliance can have three escalating consequences:
1. Companies House civil penalties — Filings rejected or delayed because the Directors' Report is incomplete attract automatic civil penalties scaling with the length of delay, doubled where late filing repeats in successive years.
2. FRC corrective action — The Conduct Committee can require revised reports and accounts, creating cost, reputational and investor risk for the company and its board.
3. Director liability and unlimited fines — Persistent or wilful failure to disclose can lead to action against named directors under the Companies Act 2006, with potential for unlimited fines in the most serious cases.
External assurance of SECR data is not legally required but is increasingly expected by lenders, insurers and supply chain customers, particularly where the company is also preparing for UK SRS S2 climate disclosures from 2027.
Who must comply with SECR in 2026?
SECR applies to all UK quoted companies of any size, plus large unquoted UK-incorporated companies and large LLPs that meet two or more of: turnover £36 million or more, balance sheet £18 million or more, or 250 employees or more.
SECR-specific thresholds were not raised by the April 2025 increase to general Companies Act size limits, so the £36m/£18m/250 test still governs SECR qualification.
What is the SECR de minimis exemption?
Organisations that consume 40 MWh (40,000 kWh) or less of energy during the reporting period qualify as low energy users and are exempt from full SECR disclosures.
Even when claiming the exemption, the company must include a statement in the Directors' Report confirming low energy user status.
For group reports, the 40 MWh threshold applies to combined parent and subsidiary consumption.
What must be disclosed under SECR?
Large unquoted companies and LLPs must disclose UK energy use (electricity, gas, transport fuel) in kWh, Scope 1 and Scope 2 greenhouse gas emissions in tCO2e, at least one intensity ratio, methodology used, prior-year comparatives from the second reporting year onwards, and a narrative on energy efficiency actions taken.
Quoted companies must also report global Scope 1 and 2 emissions and underlying global energy use.
Where do SECR disclosures appear?
Companies include SECR information in the Directors' Report filed with statutory annual accounts.
LLPs file a separate Energy and Carbon Report.
Where energy and emissions are of strategic importance, the disclosure can be placed in the Strategic Report with a cross-reference in the Directors' Report.
What penalties apply for SECR non-compliance?
SECR sits within Companies Act 2006 reporting obligations and is monitored by the FRC Conduct Committee.
Failure to include required disclosures can lead to FRC challenge, court applications to require revised accounts, Companies House civil penalties for late or rejected filings, and in serious cases personal liability for directors with potential unlimited fines under the Companies Act.
What emission factors should be used for SECR calculations?
SECR calculations should use the UK Government greenhouse gas conversion factors published annually by DESNZ (formerly BEIS/Defra).
The 2025 factor set published in June 2025 should be used for 2025/26 reporting.
Methodology must be disclosed in the report, typically following the GHG Protocol Corporate Standard and the location-based method for Scope 2.
Related guides & references
What Is SECR?
Introduction to Streamlined Energy and Carbon Reporting framework and scope
SECR Reporting Guide
Step-by-step reporting process including directors report integration
The ESOS Scheme
How ESOS energy audits feed SECR data and identify efficiency actions
UK SRS S2 Climate Disclosure
How SECR data supports future UK SRS S2 climate-related disclosures