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REPORTING YOUR CARBON EMISSIONS

Mar 14, 2019

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If you work for a ‘large’ company or Limited Liability Partnership (LLP), you’ll need to comply with new reporting requirements for periods commencing on or after 1 April 2019. The new requirements are called Streamlined Energy and Carbon Reporting (SECR) Framework.

The SECR requires all large companies to include energy usage and carbon emissions data in the directors’ report section of their annual accounts filed at Companies House. At the moment, quoted companies (approximately 1200 of them) already have to do this. The new requirement will catch approximately 11,900 further businesses.

What makes a company ‘large’?

The basic rule is that a company will qualify as large if it meets at least two of these three criteria:

  • Turnover of more than £36 million
  • Total assets of more than £18 million
  • Employee numbers of more than 250.

If your business doesn’t meet at least two of the three criteria you can relax and read no further. If it does, please read on.

UK subsidiaries which are large in their own right will not be required to report separately if they are covered by parent company’s group accounts, although they may report on a voluntary basis. If the subsidiaries are not covered by the parent company they will still need to report.

There is an option to exclude from the parent companies group directors’ report any energy and carbon information relating to a subsidiary which the subsidiary would not itself be obliged to include if reporting on its own account.

Getting into the detail

The information that must be reported in the directors’ report is:

  • UK energy use
  • The associated Scope 1 and Scope 2 emissions
  • An emissions intensity metric
  • A description of energy efficiency action taken.
  • Businesses will also be encouraged to report their Scope 3 emissions, but this is not mandatory.

What does this mean?

As a minimum, energy usage will include electricity, gas and transport.

Scope 1: Greenhouse gas emissions released on the business’s site or from its vehicles.

Scope 2: Greenhouse gases released on purchased electricity, steam, heat and cooling. These result from the business’s activities but occur on sites which it does not own or control.

Scope 3: Indirect greenhouse gas emissions resulting from the business’s operations. They can be upstream (e.g. business travel by means not owned or controlled by the business) or downstream (processing, use and end of life treatment of products which the business has sold).

There’ll be a need to record energy and fuel usage, and then apply greenhouse gas (GHG) factors. You can get these from here on the government website. It’ll help you calculate the quantities of emissions to be reported.

You should choose the factors for the year into which the majority of your financial year falls. The factors are usually published in the June for the year to which they relate to.

Any questions?

There’s lots of information on the government website and in this document. But if you’ve got any questions about this new requirement, please get in touch. And if you’re already a client of ours, please talk to your usual Cooper Parry contact, alternatively please speak to Sarah Kirkby.

 

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