Energy and carbon reporting
Energy and carbon reporting is the annual duty on large UK companies, large LLPs and every quoted company to publish how much energy they used, what it emitted, and what they did about it — inside the directors’ report, filed with the accounts [3].
The regime that carries it is Streamlined Energy and Carbon Reporting. It has applied since financial years beginning on or after 1 April 2019, and DESNZ counts about 19,900 organisations inside it — roughly three-quarters more than the 11,300 forecast when it was made [10].
What energy and carbon reporting asks for, in seven items
Seven things, every financial year, in one section of the directors’ report.
An eighth item appears only if you are leaving something out: every exemption in this regime is itself a disclosure, and the report has to say which one you are relying on [5].
That is one regime, and it is the widest of three.
Below: which of them are yours, and why the tests disagree.
Three UK regimes want the same energy data, and no two scope tests agree
Crossing one threshold tells you nothing about the other two.
The phrase carbon reporting requirements UK describes three separate statutory duties, not one.
They ask overlapping questions of the same meter readings, on three different cadences, and each has its own qualifying test written in its own instrument.
A fourth layer exists and is not statutory: SBTi targets, CDP questionnaires, PPN 06/21 carbon reduction plans for government contracts, customer supply-chain requests.
Those are contractual or voluntary, and the distinction is worth holding internally — because voluntary commitments are routinely managed as though they carried penalties, and statutory duties are occasionally managed as though they were optional.
The comparison in full, with the two energy audit regimes set against each other, is at ESOS vs SECR.
Which of these regimes actually reach a given company, and on which figures rather than on the Companies Act test most readers assume, is set out on our hub for UK carbon reporting.
The company that stopped being large and kept reporting
An illustrative case, built from two real instruments — not a real company.
A privately held UK manufacturer: turnover £41 million, balance sheet total £22 million, 180 employees.
On 6 April 2025 the Companies Act size limits rose by roughly half, and its auditors reclassified it from large to medium-sized [7].
Its finance director drew the obvious conclusion and stopped preparing the energy and carbon section.
That was wrong, and it is the single most consequential error in UK energy and carbon reporting right now.
The mechanism is worth stating precisely, because it is checkable and almost nobody states it.
SI 2024/1303 amends Schedule 7 in exactly one place — regulation 5(3), which omits paragraphs 6 and 7 and Parts 3 and 4 [7].
Energy and carbon reporting lives in Parts 7 and 7A of that same schedule, and neither was touched.
It survives because paragraphs 20B and 20C carry their own copy of the size table rather than cross-referring to section 465 — so when section 465 moved, they did not [5].
The divergence bites for financial years beginning on or after 6 April 2025 [7].
Practically: run the energy and carbon scope test separately from the accounts size test each year, from the same figures against different numbers. An auditor reclassifying a company out of ‘large’ is not a reason to drop the section.
Who does carbon and energy reporting, and who is exempted out of it
The regulations do not contain a “large company’ test. They contain an exemption, and everyone who fails to qualify for it reports.
This is a drafting point with practical consequences, and most summaries get it backwards.
Paragraph 20A(1) applies Part 7A to the directors’ report of any unquoted company, and paragraph 20B then exempts those meeting two or more of three “not more than” conditions [5].
So the familiar shorthand — two of 250 employees, £36m turnover, £18m balance sheet — is a correct restatement of who reports, arrived at from the opposite direction.
Paragraphs 20B(1) and 20C(1) require the exemption conditions to be met in the financial year and the one before it — or that the company was exempt in the preceding year [5].
A company crossing a threshold does not fall in or out on a single year’s figures, and a company that grows sharply mid-year does not become a reporter that afternoon.
Which UK carbon reporting requirements are actually yours?
Four questions, run against three separate statutory tests — SECR, ESOS Phase 4, and the FCA’s UK SRS proposal.
Nothing is sent anywhere. The whole check runs in your browser.
If you are a parent company, answer for the group. Both SECR and ESOS test aggregate figures at group level [5].
The ESOS answer is a qualification result, not a compliance plan — and note that SI 2026/701 changed what a Phase 4 notification must contain, with effect from 22 July 2026 [21].
A quoted company reports the world, and says how much of it was Britain
Part 7 is the older duty. Quoted companies have published greenhouse gas figures in the directors’ report since October 2013 — six years before SECR [34].
What 2019 added for them was the energy figure, not the emissions.
What a quoted company is not required to report is equally clear, and the guidance says so in terms: emissions associated with inputs into the company, such as its supply chain, are outside the duty [2].
That changes if the FCA confirms its UK SRS proposals — chapter 18.
Everyone else reports the UK, and the fuel they paid for
Part 7A is narrower than Part 7 in two ways that matter, and wider in one.
Narrower on territory. Paragraph 20D(5) permits the exclusion of emissions and energy consumed outside the United Kingdom [5].
Narrower on sources. Where a quoted company reports Scope 2 across electricity, heat, steam and cooling, an unquoted reporter’s Scope 2 is purchased electricity only.
Wider on transport. Paragraph 20D(1)(b) reaches fuel consumed for the purposes of transport — and that catches journeys in vehicles the company does not own. Chapter 08.
Both duties are qualified by practicality. Paragraph 20D(6) applies the requirement “only to the extent that it is practical” for the company to obtain the information, and where it is not, the report must state what is missing and why [5].
That is a comply-or-explain mechanism, not a discretion. The explanation is the compliance.
The slice of Scope 3 that is not optional — and the sentence that gets it wrong
“Scope 3 is not required under SECR” is the most repeated sentence in this subject, and it is wrong in one specific place.
The regulations never use the words Scope 1, Scope 2 or Scope 3. Those are GHG Protocol terms [15].
What Part 7A requires is emissions from “the consumption of fuel for the purposes of transport” for activities for which the company is responsible [5].
The government guidance defines that to include fuel used in personal and hire cars on business use, including fuel for which the organisation reimburses employees following business mileage claims [2].
Under the GHG Protocol that is Scope 3. Under Part 7A it is mandatory.
The practical consequence is that grey-fleet mileage — the least owned dataset in most finance functions — is a statutory figure.
It usually sits in expenses, not in energy, which is why it is the item most often missing from a first-year disclosure.
For what the three scopes mean in general, with worked examples, see Scope 1, 2 and 3 emissions explained. Full value-chain Scope 3 becomes material under UK SRS S2, not here.
A green tariff does not zero your Scope 2
This is covered by no page in the current top ten, and it is the defect that most often makes a disclosure wrong rather than merely thin.
There are two ways to account for purchased electricity.
Location-based uses the average emissions intensity of the grid you drew from. It answers: what did the electricity that reached this building actually cost the atmosphere?
Market-based uses the contractual instruments you hold — a green tariff, a power purchase agreement, Renewable Energy Guarantees of Origin [32]. It answers: what did you pay for?
The government’s guidance sets location-based as the reporting basis, with a market-based figure permitted alongside it and the instruments named [2].
Alongside, not instead. A disclosure that reports only a market-based figure — often a striking zero — has not reported the number the framework asks for.
One further consequence, and it catches people in year two: if you switch tariff, your market-based figure moves and your location-based figure does not.
Reporting on the market basis therefore produces a year-on-year change that reflects a procurement decision rather than any change in consumption — which is precisely what an intensity ratio is supposed to make visible.
Turning kWh into tCO2e: which factor set is yours
The factors are republished every year, and the year you use is decided by your reporting period, not by the date you sit down to write.
DESNZ published the 2026 set on 11 June 2026 [13].
The flat-file format was reissued in July 2026 to correct data-entry errors; the June full set was unchanged. If you are working from a flat file, take the reissue [13].
Eight annual sets now exist since the guidance that tells you to use them was last updated — every one of them at a different URL from the guidance itself [14].
Grid intensity has fallen sharply across that period, which is why a company can cut its reported Scope 2 without changing a single meter reading — and why the methodology statement has to name the factor year.
One intensity ratio, and which one is yours to choose
The regulations require “at least one ratio which expresses the company’s annual emissions in relation to a quantifiable factor associated with the company’s activities” [5].
That is the whole specification. There is no prescribed denominator, no prescribed unit, and no list to choose from.
The ratio exists to make an absolute tonnage comparable through growth and contraction. A company that acquires a division and reports more emissions has not got worse; a company that sells one and reports fewer has not got better.
The one rule that is not written down but is enforced by comparability: choose it once and keep it.
Changing the denominator between years, without restating, produces a series nobody can read — including you.
The energy efficiency narrative, and the sentence you cannot omit
This is the only part of the disclosure that is prose, and it is the part that most often fails.
The duty is a description of the principal measures taken during the financial year to improve energy efficiency [4][5].
If no measures were taken, the report must say so. That is the sentence companies leave out, and its absence is not a neutral silence — the disclosure is incomplete without it [2].
The FRC’s 2021 thematic review on this regime found the narrative was where quality varied most, and singled out generic descriptions that could belong to any company [24].
One practical route, and it is underused: if you are also an ESOS participant, the Phase 4 audit has already identified your measures and, since SI 2026/701, requires an estimate of savings achieved since the previous compliance date [21].
That is the same evidence base the annual narrative needs, produced on a four-year cycle for a different regulator.
Four ways out, three of which leave a sentence behind
Every exemption in this regime except one is itself a disclosure. Taking it silently is not taking it.
There is no fifth. A company that is in scope and has none of these has a disclosure to make, and no mechanism for deferring it.
Build the disclosure the government’s own review says should exist
There is no prescribed table, no template in the regulations and no filing schema — which is why published disclosures run from four lines to four pages.
DESNZ’s May 2026 post-implementation review names this as a defect and recommends that a standardised disclosure template be introduced [10].
None exists yet. This one is built from the statutory items in chapter 01 and nothing else — every row is a paragraph reference, not an opinion about best practice.
Choose your reporter type and it assembles the block, with the rows that do not apply to you removed and the exemption sentences included where you say you are relying on one.
A worked example with real narrative prose sits in the SECR report template.
What happens if you do not, and the fine that does not exist
There is no energy and carbon reporting regulator, no register, no portal and no dedicated penalty.
DESNZ says so in its own words: the framework rests on statutory placement in the annual report plus FRC corporate reporting reviews, with no dedicated civil sanction regime or proactive monitoring [10].
So the exposure is structural rather than punitive, and it comes from three directions.
“There is a fine for non-compliance.” No specific civil penalty attaches to this duty. Any figure circulating online is unsourced.
“It is enforced by the FRC’s Conduct Committee.” That committee oversees enquiries and enforcement against accountants and auditors. Corporate reporting review is a different function [23].
“The FRC has taken action.” The FRC states that it and its predecessors have resolved every case voluntarily, without applying for a court order [23]. No published enforcement case exists on this regime, and the FRC’s 2024/25 Annual Review of Corporate Reporting does not mention it at all [25].
None of which makes the duty optional. It makes the failure quiet, which is a different problem — and one the government has now measured.
What the government found after seven years of it
Two documents published in 2026 changed what can honestly be said about this regime, and no page in the current search results reflects either.
DESNZ commissioned an evaluation from ICF Consulting Services and IFF Research, published 29 January 2026 [11].
It then published a statutory post-implementation review on 26 May 2026, concluding that the requirements should be retained with amendments [10].
The Regulatory Policy Committee rated the review fit for purpose on 15 May 2026 [12].
The evaluation put suspected non-compliance at 14–23%, concentrated among private companies and LLPs rather than quoted reporters [11].
Its econometric work found statistically significant energy reductions of 4.5% in 2020 and 6.2% in 2021; the 4.9% estimated for 2022 was not significant [11].
On money, it assessed benefits of £8,100m against costs of £3,000m — a net present social value of £5.1 billion and a benefit–cost ratio of 2.72, falling to 1.48 on the cautious energy-saving assumption [11].
“11,900 companies in scope” circulates widely, including in earlier versions of this page. It appears in no government document.
The 2018 impact assessment forecast 11,300. The 2026 evaluation measured about 19,900 — roughly 76% more than forecast [10][11].
The environmental reporting guidelines everyone is sent to were last updated in March 2019
The authoritative guidance on this subject is a 152-page PDF, and it predates almost everything a 2026 reporter needs to know.
It is Environmental Reporting Guidelines: including Streamlined Energy and Carbon Reporting guidance, published jointly by DESNZ, Defra and the former BEIS [1].
The GOV.UK page was first published in June 2013 and last updated on 29 March 2019 [1].
The richer HTML explainer that used to sit alongside it was withdrawn in March 2022 as out of date and never replaced, which is why the surviving entry point is a landing page of a few hundred words in front of a PDF.
The practical instruction is not to ignore it. Chapter 2 of that PDF remains the best account of how to draw a boundary, and Annexes B to F still answer questions nothing else does [2].
The instruction is to date everything you take from it, and to check any threshold, deadline or adjacent regime against the instrument rather than against the guidance.
The directors’ report is going away, and energy reporting is moving with it
Three things are in motion. One is government policy, one is a regulator’s proposal, and one is a promised consultation that has not launched.
The directors’ report itself. A written ministerial statement of 21 October 2025 says the government will aim to remove the requirement for any company to produce a directors’ report [19].
The same statement is explicit about what survives: “Some useful reporting requirements, including reporting on energy and emissions, will be retained and moved elsewhere in the Annual Report” [19].
So the container changes and the duty does not. That is the opposite of the repeal that gets predicted online.
UK SRS and the FCA. Final UK SRS S1 and S2 were published on 25 February 2026 and are available for voluntary use [17].
The FCA proposed, in CP26/5 on 30 January 2026, to require them of listed issuers for accounting periods beginning on or after 1 January 2027, with Scope 3 deferrable by a year and non-climate S1 content by up to two [18].
As at 6 August 2026 no policy statement has been published, and nothing is mandatory. The FCA has said it aims to publish one in autumn 2026 [18].
The consultation that has not arrived. Both the ministerial statement and the post-implementation review promise a 2026 consultation on streamlining energy and emissions reporting [10][19].
The review lists what it would consider: clearer guidance on eligibility, site inclusion and group boundaries; a standardised disclosure template; and exploring alignment of definitions and metrics with ISSB, CSRD and TCFD [10].
It commits to none of them, and nothing had launched by the date at the top of this page.
For the standards themselves see UK SRS S1 and S2, for the dates see the UK SRS timeline, and for who the FCA proposal actually reaches see UK SRS compliance.
Eighteen chapters, and the duty is still seven items and one filing date.
If your company or LLP exceeds two of £36 million turnover, £18 million on the balance sheet and 250 employees — or is quoted at any size — you publish your energy, your emissions, one intensity ratio, your method and what you did about it, in the annual report, every year, whatever your accounts now call you.
Knowing what the seven items are is the easy half. The other half is proving where each number came from.
Start from a disclosure you can fill in Or see what holds the dataset between years
UKSRS — independent reference on UK sustainability and energy reporting. Every figure on this page is cited to a named primary source.
Energy and carbon reporting — the short reference
Scale of the regime: organisations in scope, mandatory start, qualifying thresholds, where it is disclosed.
What SECR compliance is
Streamlined Energy and Carbon Reporting is the UK’s foundational framework for mandatory corporate energy and carbon disclosure, in force since April 2019 [27].
Energy and carbon reporting is the everyday name for what it requires: the carbon and energy reporting requirements large UK companies must satisfy in each directors’ report — energy use, emissions, an intensity ratio and efficiency actions.
It was established by the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 [3].
It succeeded the CRC Energy Efficiency Scheme, which closed after the 2018–19 compliance year and was administered by what was then the Department for Business, Energy and Industrial Strategy.
CRC priced carbon through purchased allowances; this regime discloses it, and reaches roughly four times as many organisations. The lost revenue was replaced by an increase in the Climate Change Levy.
SECR guidance combines energy reporting with greenhouse gas disclosure, and is the practical foundation for climate reporting under UK SRS S2.
Companies with mature processes here establish the data collection and governance capabilities the later frameworks assume.
It is one strand of the wider carbon reporting requirements for UK companies, sitting alongside financial disclosures in the same filing made to Companies House.
SECR scope and qualification thresholds
Three categories — large companies, large LLPs and quoted companies — on a threshold test that is written out inside the SECR regulations and does not cross-refer to the Companies Act size limits.
These thresholds sit in their own right at paragraphs 20B and 20C of Schedule 7 to SI 2008/410.
The concept of a size test comes from the EU Accounting Directive via the Companies Act, but these particular figures are free-standing — which is why they did not move when the Companies Act limits did in April 2025.
For threshold-by-threshold scenarios including group aggregation, see our SECR thresholds guide, and the full statutory reference at SECR requirements.
Companies building sustainability teams for this work should plan for both the current requirements and the UK SRS expansion — see sustainability recruitment. Those needing implementation support often engage net-zero consultants for energy strategy alongside compliance delivery.
The seven mandatory disclosures
Scope 1 and Scope 2 emissions in tCO2e, total energy in kWh, an intensity ratio and an efficiency narrative — using DESNZ conversion factors and GHG Protocol methodology.
Companies should establish data collection covering every significant energy source across the reporting boundary, and many rely on dedicated carbon reporting tools and SECR reporting software to automate collection, ensure calculation accuracy and produce audit-ready documentation.
For a plain-English walkthrough of what each scope means, with worked examples, see Scope 1, 2 and 3 emissions explained.
Earlier versions stated a 92% adoption rate, sourced to an analysis of FTSE 350 and large private company reporting. That figure could not be traced to a primary source and has been removed.
The measured position, from DESNZ’s January 2026 evaluation, is that 67% of a Companies House sample disclosed both Scope 1 and Scope 2 — 85% of quoted reporters and 66% of unquoted — with suspected non-compliance at 14–23% [11].
From CRC to UK SRS: how the requirements evolved
From the 2019 mandatory start, through the 2025 threshold divergence, to the UK SRS standards issued in 2026 and the FCA’s proposal for 2027.
Energy-efficiency narrative: the quality bar
This is not just a metric regime. It requires a narrative of actions taken in the reporting period — building retrofits, equipment upgrades, process optimisation, behavioural change — with quantified savings where feasible.
Effective narratives describe specific measures and quantify the saving, explaining the calculation method and assumptions used; broader efficiency measurement conventions are set out in the IEA’s Energy Efficiency reporting.
Leading disclosures combine quantitative savings with a strategic narrative explaining priorities, governance and alignment with net-zero commitments.
Professional guidance from ICAEW emphasises connecting efficiency measures with business strategy and financial performance [36].
The FRC’s September 2021 thematic review on this regime remains the only published regulatory assessment of disclosure quality, and it identified generic narrative as the main weakness [24].
Companies can strengthen the disclosure by linking measures to broader ESG strategy, which also provides the foundation for UK SRS transition plan requirements.
SECR vs UK SRS S2 vs ESOS vs CSRD
Four UK and EU climate-reporting regimes side by side — scope, population and key requirement.
UK SRS S2 is a proposal for listed issuers, not a settled obligation — see UK SRS S1 and S2 and CSRD vs UK SRS for the comparative analysis.
Where SECR sits in the annual report
The disclosures sit inside the directors’ report under the Companies Act 2006, not in a standalone document — which places climate information alongside the strategic report and the governance statement.
The content must be clearly identifiable within the directors’ report, and it is the board that approves and signs it [9].
Companies may cross-reference more detailed sustainability information elsewhere in the annual report or in a separate sustainability report, but the core metrics must appear in the directors’ report itself to satisfy the statutory requirement.
The wider expectations for the annual report as a whole — including board oversight of material risks — are set by the FRC Corporate Governance Code, which applies to companies with equity shares in the commercial companies category on a comply-or-explain basis [38]. The energy and carbon duty itself comes from the Companies Act regulations, not from the Code.
General filing requirements for the annual report and accounts are set out in the government’s company reporting regulations guidance.
Integration with emerging UK SRS requirements means coordinating several frameworks over the same dataset.
For deadlines across different company types and year ends, see the SECR deadline calendar.
Energy and carbon reporting under SECR
SECR is the UK’s statutory route for energy and carbon reporting — Scope 1, Scope 2 and total kWh, inside the directors’ report under SI 2018/1155.
Energy and carbon reporting in the UK is delivered through the Streamlined Energy and Carbon Reporting framework introduced under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 [3].
About 19,900 large UK companies, LLPs and quoted companies are in scope, of which roughly 14,000 report directly each year [10][11].
The mandatory disclosures sit at the heart of it: total energy use in kWh, Scope 1 and Scope 2 emissions in tCO2e using DESNZ conversion factors, at least one intensity ratio, the methodology, comparatives, and a narrative on energy-efficiency measures.
The same dataset is the on-ramp to the climate metrics proposed under UK SRS S2 from January 2027.
Thresholds: where the SECR requirements start
Two of three — 250 employees, £36m turnover, £18m balance sheet — and quoted companies are caught regardless of size. Those figures are written out inside the SECR regulations themselves, so the April 2025 Companies Act rise did not move them.
The SECR reporting threshold is set out in its own right at paragraphs 20B and 20C of Schedule 7 to SI 2008/410. It does not cross-refer to the Companies Act 2006 size limits, which is why it still reads £36m and £18m.
Exceeding at least two of the three tests triggers full SECR disclosures in the directors’ report — subject to the two-year rule in paragraphs 20B(1) and 20C(1).
SI 2024/1303 raised the accounts thresholds to £54m turnover and £27m balance sheet on 6 April 2025, so a company can now be medium-sized for its accounts and still a SECR reporter. Auditors reclassifying a company out of ‘large’ is not a reason to drop the energy and carbon section.
Quoted companies skip the arithmetic entirely — a listing brings the full SECR reporting requirements into play at any size, with worldwide energy use rather than UK-only.
Official SECR guidance: where it actually lives
The government guidelines, the annual conversion factors, and the FRC’s published review of disclosure quality.
The authoritative SECR guidance is Chapter 2 of HM Government’s Environmental Reporting Guidelines (PB13944), which interprets SI 2018/1155 and includes suggested formats and example disclosures [1][2].
It is paired each year with the DESNZ greenhouse gas conversion factors used to turn energy data into emissions figures [13][14].
For a structured starting point that turns this guidance into a working disclosure, use our SECR report template and disclosure examples, and the wider SECR section hub for the full guide set.
The seven SECR reporting requirements in detail
Seven elements — energy, Scope 1 and 2 emissions, an intensity ratio, the methodology, comparatives, the efficiency narrative, and any exemption statement.
The SECR reporting requirements demand: total energy consumption in kWh; Scope 1 and Scope 2 emissions in tCO2e, plus transport fuel including grey fleet for large unquoted companies and LLPs; at least one intensity ratio; a methodology statement; prior-year comparatives from the second reporting year; a narrative of energy-efficiency actions taken; and, where applicable, a low-energy-user or omission statement.
Six of the seven bind from the first reporting year. Comparatives arrive in the second, and the exemption statement is reached only if you are relying on the low-energy de minimis, the subsidiary exemption, the seriously-prejudicial limb or the not-practicable qualification — each of which must be stated, not silently taken.
The complete threshold-by-threshold breakdown lives in our dedicated SECR requirements reference, and a section-by-section drafting shell in the SECR report template.
SECR compliance: the annual cycle
There is no SECR filing, no SECR portal and no SECR regulator inbox. Compliance means the energy and carbon section is inside the directors’ report the board approves, and it reaches Companies House with the accounts.
SECR compliance is a property of the annual report, not a separate submission. That single structural fact explains most of what companies get wrong: there is no acknowledgement to wait for, no deadline distinct from the accounts deadline, and no enforcement letter to react to.
The deadline is therefore the filing deadline for the accounts themselves — nine months after the financial year end for a private company, six for a public one.
Miss the energy and carbon section and the directors’ report is defective. The exposure sits with the directors under the Companies Act rather than in any SECR-specific penalty regime, because none exists [9][10].
SECR energy compliance also has to survive audit. The auditor states whether the directors’ report is consistent with the accounts, and an energy and carbon section that contradicts the utilities cost lines is exactly the kind of inconsistency that gets picked up.
Not in the arithmetic. In the boundary — half-year acquisitions, leased sites where the landlord holds the meter, and grey-fleet mileage nobody owns.
Fix the boundary definition once and write it into the methodology statement, and the following years become a data refresh rather than a rebuild.
For the step-by-step walkthrough, see the SECR compliance guide.
Streamlined Energy and Carbon Reporting explained
What the name describes: a reporting duty streamlined onto an existing document, replacing the free-standing CRC Energy Efficiency Scheme return that closed in 2019.
Streamlined Energy and Carbon Reporting is the full name of the framework everyone shortens to SECR. The word doing the work is streamlined: the policy intent was to stop asking companies for a separate energy return and instead attach the disclosure to a document they already had to produce and file.
It replaced the CRC Energy Efficiency Scheme, which ended after the 2018–19 compliance year.
In everyday use, streamlined energy and carbon reporting and SECR are the same thing, and both appear in the legislation’s explanatory material. The statutory text itself uses neither: SI 2018/1155 is titled the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 [3].
Carbon reporting requirements in the UK, and where SECR sits
Mandatory carbon reporting in the UK is not one regime. It is SECR in the annual report, ESOS on a four-year audit cycle, and UK SRS S1 and S2 proposed for listed issuers from 2027 — three scope tests, three cadences, one underlying dataset.
The carbon reporting requirements UK companies actually face depend on which of three tests they cross, and the tests are independent of one another. Crossing the SECR threshold says nothing about whether you qualify for ESOS, and neither determines UK SRS scope.
Mandatory carbon reporting starts with SECR: energy in kWh and Scope 1 and Scope 2 emissions in tCO2e, annually, in the annual report. That is the widest of the three, at roughly 19,900 organisations [10][11].
Everything layered on top — SBTi targets, CDP responses, supplier questionnaires, PPN 06/21 carbon reduction plans for government contracts — is either contractual or voluntary.
It is worth being precise about that distinction internally, because voluntary commitments frequently get managed as if they carried statutory penalties, and statutory duties occasionally get managed as if they were optional.
For large companies the practical question is sequencing rather than choice. The SECR dataset — metered energy, fuel, fleet, boundary — is the same dataset ESOS audits interrogate and the same one UK SRS S2 would demand climate metrics from.
Building it once, to the standard the strictest regime requires, is cheaper than building it three times. See ESOS vs SECR for the two scope tests side by side, and carbon reporting software for the tooling that holds the dataset between cycles.
SECR regulations and the legislation behind them
One instrument, amending one schedule, under one Act. Which paragraph your duty sits in decides whether you report UK energy or worldwide energy — and whether the April 2025 threshold rise touched you.
The SECR regulations are the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 — SI 2018/1155.
They are not free-standing. They work by inserting Parts 7 and 7A into Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, SI 2008/410, made under the Companies Act 2006.
Which Part applies decides the content. Part 7 governs quoted companies and requires worldwide energy use. Part 7A governs large unquoted companies and LLPs, is UK-only, and adds the transport-fuel figure that catches grey fleet.
The SECR legislation takes effect for financial years beginning on or after 1 April 2019 — beginning, not ending. That distinction determined which companies had a 2019 obligation and still determines the comparative year in restatements.
SECR carbon reporting: Scope 1, Scope 2 and the directors’ report
Listed companies in the UK are required to report their annual GHG emissions in their directors’ report — and since April 2019 so are large unquoted companies and LLPs. The duty is broader than the listing, and older than SECR.
The statement is correct and worth stating precisely: quoted UK companies must report their annual greenhouse gas emissions in the directors’ report, under Part 7 of Schedule 7 to SI 2008/410. That duty began in October 2013, six years before SECR, and covers worldwide Scope 1 and Scope 2 emissions [34][4].
What SECR changed in 2019 was the population, not the location. SECR carbon reporting extended the same directors’-report duty to large unquoted companies and LLPs through Part 7A, and added the energy consumption figure in kWh — which quoted companies had not previously had to give [3].
A green tariff does not zero your Scope 2. The location-based figure, calculated on the grid average, is the one the guidance asks you to report.
A market-based figure sits alongside it with the contractual instruments named — including any Ofgem-certified scheme or REGO certificates [32].
SECR disclosure requirements, with a worked example
What the disclosure has to contain, and what it looks like on the page once it does. Roughly a page of the annual report for a single-site company, two or three for a group.
The SECR disclosure requirements set content, not format. There is no prescribed table, no template in the regulations and no filing schema — which is why published disclosures vary from four lines to four pages.
DESNZ’s May 2026 review recommends that a standardised template be introduced precisely because of this; none exists yet [10].
What must be present is the energy figure, the emissions figures, a comparative from year two, an intensity ratio, the methodology and the efficiency narrative.
Illustrative SECR disclosure for a large unquoted company — worked example figures, not a real filing.
Underneath the figures the disclosure needs two paragraphs of prose: the methodology — GHG Protocol Corporate Standard, the DESNZ conversion factors for the matching year, the boundary and any estimation — and the efficiency narrative naming what was actually done, with the saving quantified where it can be.
More SECR disclosure examples, including the low-energy-user statement and a group disclosure with a subsidiary exemption, are in the SECR report template. To assemble the block for your own reporter type, use the disclosure builder above.
SECR as the on-ramp to UK SRS
Use the current reporting cycle to test enhanced data collection, governance and assurance. The same teams, processes and systems would carry UK SRS S2 if the FCA confirms its proposal.
Companies can use the current cycle to prepare for enhanced climate reporting by expanding data collection beyond the minimum [18].
Preparation should focus on what the FCA has proposed would become mandatory under UK SRS implementation — Scope 3 measurement, scenario analysis and governance — while noting that no policy statement has been published and nothing is yet required [18].
Organisations needing carbon footprint assessment across complex operations often partner with carbon footprint consultants to establish methodologies that survive both regimes.
Companies planning for UK SRS compliance should use the current reporting cycles to test the data collection, governance and stakeholder engagement that comprehensive sustainability reporting assumes.
Energy and carbon reporting — frequently asked questions
The questions that come up most: who, what, where, methodology, and the bridge to UK SRS.
Which companies must comply with SECR reporting?
SECR applies to three categories of UK organisation: large companies, large LLPs, and quoted companies regardless of size.
For unquoted companies and LLPs the test is drafted as an exemption: you report unless you meet two or more of three conditions — turnover not more than £36 million, balance sheet total not more than £18 million, and not more than 250 employees.
So in practice a company reports if it exceeds two of the three. It is two of three, not any one of them.
The conditions must be met in the financial year and the preceding one, or the company must have been exempt in the preceding year — the two-year rule at paragraphs 20B(1) and 20C(1) [5].
What emissions must be reported under SECR?
SECR requires Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from purchased energy), in tonnes of CO2 equivalent, following GHG Protocol methodology [15].
Quoted companies report Scope 2 across purchased electricity, heat, steam and cooling; unquoted companies and LLPs report purchased electricity only.
Full value-chain Scope 3 is not mandatory. One narrow slice is: large unquoted companies and LLPs must include fuel consumed for transport, which the government guidance defines as including hire cars and employee-owned vehicles on business use where the organisation pays or reimburses [2][5].
Everything else — employee rail, flights the company does not operate, supply chain — is voluntary here, and becomes material under UK SRS requirements if the FCA confirms its proposal.
How should energy efficiency measures be disclosed?
SECR requires a narrative description of the principal measures taken during the reporting period to improve energy efficiency.
Describe the actions taken, quantify the energy savings where possible, and explain the methodology used for the calculation.
If no measures were taken, the report must say so. That statement is part of the requirement, not an alternative to it [2].
Good practice includes investment amounts, expected payback periods, and alignment with the wider sustainability strategy. Companies preparing for UK SRS compliance should integrate efficiency measures with transition planning.
Where must SECR disclosures appear in annual reports?
SECR information must be included in the directors’ report section of the annual report and accounts. An LLP puts it in an Energy and Carbon Report instead [6].
The disclosure should be clearly identifiable and may be presented as a separate subsection or integrated with other environmental reporting.
Companies may cross-reference more detailed sustainability information elsewhere in the annual report or in a separate sustainability report, but the core metrics must appear directly in the directors’ report to satisfy the legal requirement.
The board approves and signs that report, and the liability for a defective one sits with the directors under the Companies Act [9].
What methodology guidance should be followed?
Reporting should follow the UK government environmental reporting guidelines, which are built on the GHG Protocol Corporate Accounting and Reporting Standard [1][15].
An equivalent such as ISO 14064-1:2018 is also acceptable [16].
Companies must disclose the methodology used and any significant changes from previous years.
Key requirements include using the UK government conversion factors for the year that matches the reporting period, consistent boundary definitions across periods, and appropriate treatment of acquisitions, disposals and structural changes.
Note that those guidelines were last updated on 29 March 2019. Check any threshold, deadline or adjacent regime against the instrument rather than the guidance [1].
How does SECR prepare companies for UK SRS compliance?
SECR provides the foundational experience for UK SRS implementation — established governance processes, data collection systems and emissions measurement capability.
The transferable capabilities are board-level oversight of climate reporting, systematic energy and emissions data collection, stakeholder engagement, and integrating climate information with financial reporting.
Organisations building scalable foundations should consider carbon reporting software platforms that support both the current requirements and any future UK SRS obligation.
UK SRS S1 and S2 were issued on 25 February 2026 and are currently voluntary. The FCA has proposed requiring them of listed issuers from accounting periods beginning 1 January 2027, but no policy statement had been published as at 6 August 2026 [17][18].
Is Scope 3 reporting mandatory under SECR?
Almost none of it, and the exception is specific.
The regulations never use the term “Scope 3”. What Part 7A requires of large unquoted companies and LLPs is emissions from “the consumption of fuel for the purposes of transport” [5].
The government guidance defines that to include fuel used in personal and hire cars on business use, including fuel for which the organisation reimburses employees following business mileage claims [2].
Under the GHG Protocol that is Scope 3, so a narrow slice of Scope 3 is mandatory. Employee rail travel, flights the organisation does not operate, commuting and the supply chain are all outside it.
Does a green energy tariff reduce my reported Scope 2 emissions?
Not the figure the framework asks you to report.
The government’s guidance sets the location-based figure — calculated on the average intensity of the grid you drew from — as the reporting basis [2].
A market-based figure reflecting a green tariff, a power purchase agreement or REGO certificates may be disclosed alongside it, with the instruments named [32].
Alongside, not instead. Reporting only a market-based figure is one of the more common defects in published disclosures.
Are there penalties or fines for SECR non-compliance?
There is no SECR-specific penalty, no regulator and no register.
DESNZ’s 2026 post-implementation review states that enforcement rests on statutory placement in the annual report plus FRC corporate reporting reviews, with no dedicated civil sanction regime or proactive monitoring [10].
The exposure is that the directors’ report is defective, which is a Companies Act matter for the directors [9]; and the FRC’s Corporate Reporting Review can, in principle, apply to court under section 456 — a power the FRC says it and its predecessors have never had to use [23][26].
Any specific fine figure circulating online for SECR is unsourced.
Is SECR being replaced by UK SRS?
No. The government has answered this twice, in opposite directions to the rumour.
The DESNZ post-implementation review of 26 May 2026 recommends retaining the requirements with amendments, and the Regulatory Policy Committee rated that review fit for purpose [10][12].
The written ministerial statement of 21 October 2025, which announces the intention to abolish the directors’ report itself, says explicitly that “some useful reporting requirements, including reporting on energy and emissions, will be retained and moved elsewhere in the Annual Report” [19].
So the container may change. The duty is being kept, and a 2026 consultation on streamlining it has been promised but had not launched as at 6 August 2026.
Energy and carbon reporting — terms
Energy and carbon reporting — the primary sources
Every figure on this page traces to one of these. Legislation, government publications and standard-setters only.
- Environmental Reporting Guidelines: including Streamlined Energy and Carbon Reporting guidance — DESNZ, Defra and BEIS. First published 12 June 2013, last updated 29 March 2019.
- Environmental Reporting Guidelines (PB13944), full text — 152 pages, March 2019.
- The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, SI 2018/1155 — made 6 November 2018, in force 1 April 2019.
- SI 2008/410, Schedule 7, Part 7 — disclosure of greenhouse gas emissions and energy consumption, quoted companies.
- SI 2008/410, Schedule 7, Part 7A — large unquoted companies, including the paragraph 20B and 20C exemption tests.
- The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, SI 2008/1911 — the LLP Energy and Carbon Report.
- The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024, SI 2024/1303 — made 9 December 2024, in force 6 April 2025. Regulation 5(3) is the only Schedule 7 amendment.
- Companies Act 2006, section 465 — the medium-sized company size test, as amended to £54m and £27m.
- Companies Act 2006, section 419 — approval and signing of the directors’ report.
- 2026 post-implementation review of the SECR Regulations 2018 — DESNZ, published 26 May 2026. Recommends retaining the requirements with amendments.
- Evaluation of the Streamlined Energy and Carbon Reporting Regulations — DESNZ, by ICF Consulting Services and IFF Research, published 29 January 2026.
- Regulatory Policy Committee opinion RPC-DESNZ-26154-PIR(1) — 15 May 2026. Rated fit for purpose.
- Greenhouse gas reporting: conversion factors 2026 — DESNZ, published 11 June 2026; flat-file format reissued July 2026.
- Government conversion factors for company reporting — the full annual collection.
- GHG Protocol Corporate Accounting and Reporting Standard — WRI and WBCSD.
- ISO 14064-1:2018 — greenhouse gases, organisation-level quantification and reporting.
- UK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2 — DBT, 25 February 2026. Available for voluntary use.
- FCA CP26/5: Aligning listed issuers’ sustainability disclosures with international standards — 30 January 2026, closed 20 March 2026. A consultation; no policy statement as at 6 August 2026.
- Written Ministerial Statement HCWS973 — 21 October 2025. Directors’ report to be removed; energy and emissions reporting retained and relocated.
- The Energy Savings Opportunity Scheme Regulations 2014, SI 2014/1643, regulation 4 — compliance periods and qualification dates.
- The Energy Savings Opportunity Scheme (Amendment) Regulations 2026, SI 2026/701 — made 23 June 2026, in force 22 July 2026.
- Energy Savings Opportunity Scheme (ESOS) guidance — GOV.UK.
- FRC Corporate Reporting Review — operating procedures. Scope expressly includes the LLP energy and carbon report.
- FRC thematic review: Streamlined Energy and Carbon Reporting — September 2021.
- FRC Annual Review of Corporate Reporting 2024/25 — September 2025.
- Companies Act 2006, section 456 — application to court for a declaration or revision order.
- Streamlined Energy and Carbon Reporting — GOV.UK publication.
- The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, SI 2022/31.
- UK greenhouse gas emissions reporting: Scope 3 emissions — call for evidence, 19 October 2023.
- ICAEW — Carbon and energy reporting.
- Local authority greenhouse gas emissions reporting guidance — GOV.UK.
- Ofgem — environmental and social schemes, including REGO.
- Guidance on measuring and reporting greenhouse gas emissions from freight transport operations — Defra and DfT.
- The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, SI 2013/1970 — quoted-company GHG reporting from October 2013.
- Companies Act 2006, section 385 — the definition of a quoted company.
- ICAEW — sustainability.
- IEA — Energy Efficiency.
- FRC — UK Corporate Governance Code.
The SECR guide set
Dedicated pages on compliance, requirements, templates, ESOS and UK SRS — the wider UK climate-reporting stack this duty sits inside.
Related references
Independent reference. Not advice. Every figure above is cited to a named, dated primary source in the source list. Verified 6 August 2026.