SECR reporting has applied to UK organisations since financial years beginning on or after 1st April 2019. For most businesses in scope, Streamlined Energy and Carbon Reporting (SECR) has settled into an annual routine: gather the data, calculate the emissions, include the figures in the Directors’ Report, and move on to next year.
That routine is likely to change. In May 2026 the government published its statutory review of SECR, and while it recommended keeping the regime, it also identified where the current rules fall short. Separately, and this is a genuinely different development, not part of the same reform, the UK Sustainability Reporting Standards have been published, introducing a new climate disclosure framework aimed initially at listed companies. Between them, these two changes will reshape what UK organisations are expected to disclose over the next few years.
In this guide, we cover what SECR requires today, who has to comply, what the government’s review recommended, and what the arrival of UK SRS means for businesses that may not be directly in scope.
What is SECR?
SECR requires qualifying UK organisations to disclose their energy use and carbon emissions in their annual reports. It was introduced as the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme was wound up, taking over its reporting function and significantly widening the number of organisations subject to mandatory carbon disclosure.
The purpose is transparency. By placing energy and emissions data in the Directors’ Report, or, for LLPs, the Energy and Carbon Report – alongside the financial statements, SECR was designed to raise awareness of energy use at board level.
It is worth being clear about what SECR is not. It is a reporting obligation, not an audit obligation. Unlike ESOS, there is no requirement for a qualified assessor, and no requirement to act on what the figures show. The disclosures themselves are not subject to statutory audit: the auditor’s duty is limited to checking that the information is not materially inconsistent with the financial statements and that it has been prepared in accordance with legal requirements. Independent assurance of the underlying data is voluntary.
Who has to comply with SECR?
Three groups fall within scope.
Quoted companies. All UK quoted companies are in scope irrespective of size. “Quoted company” is a defined term covering companies listed on the London Stock Exchange Main Market, an EEA regulated market, or the NYSE or Nasdaq. AIM-listed companies are not quoted for these purposes, and fall in scope only if they meet the large unquoted test below. Quoted companies report global energy use and global Scope 1 and Scope 2 emissions, separately identifying the UK and offshore area element.
Large unquoted companies. A company qualifies as large if it meets at least two of the following three criteria:
- Turnover of £36 million or more
- Balance sheet total of £18 million or more
- 250 or more employees
Large LLPs. The same two-of-three test applies.
Large unquoted companies and LLPs report energy use and emissions for the UK, including the UK offshore area, rather than globally.
A threshold change worth checking
The Companies Act 2006 company size thresholds increased for financial years beginning on or after 6th April 2025, with the medium-sized limits rising to £54 million turnover and £27 million balance sheet total. The SECR thresholds were deliberately left unchanged at £36 million and £18 million.
The practical consequence is that a company can now be classified as medium-sized under the Companies Act and still be within SECR scope. If your finance team reassessed your size classification after April 2025, it is worth confirming your SECR position separately rather than assuming the two move together.
The low energy user exemption
Organisations consuming 40 MWh or less of energy during the reporting period qualify as low energy users and are exempt from the detailed disclosures. They must still state in their report that they qualify for the exemption.
In practice, 40 MWh is a very low threshold, roughly the annual consumption of a handful of homes, so this exemption applies to relatively few organisations that meet the size criteria.
SECR and ESOS: check both separately
Many organisations in SECR scope will also qualify for ESOS, but the tests are different and one does not imply the other.
ESOS Phase 4 qualification, assessed on 31st December 2026, applies to organisations with 250 or more employees, or with an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million. These sterling thresholds replaced the euro-denominated figures used in earlier phases.
What must you report?
For large unquoted companies and LLPs, the minimum disclosure is:
- UK energy use in kWh, covering as a minimum electricity, gas and transport fuel
- Scope 1 and Scope 2 greenhouse gas emissions in tonnes of CO2 equivalent
- At least one intensity ratio, a normalising metric such as tCO2e per £m turnover, per employee, or per unit of production
- The energy efficiency actions taken during the reporting period
- The methodology used to calculate the figures
- Prior year comparators for all of the above, after the first year of reporting
Quoted companies report the same information on a global basis. Scope 3 emissions are voluntary but encouraged.
Two requirements are commonly overlooked. The first is transport fuel, which is in scope for large unquoted companies and LLPs, including business travel in rental or employee-owned vehicles where your organisation purchases the fuel. The second is the energy efficiency narrative, which is mandatory rather than optional. If no measures were taken during the reporting period, that must be stated in the report.
What the government’s 2026 review found
On 26th May 2026, the Department for Energy Security and Net Zero published its post-implementation review of the SECR regulations, a statutory exercise assessing whether the regime has met its objectives and remains proportionate.
The findings were broadly positive on transparency. The review found that 79% of businesses in scope disclosed data they would not otherwise have published, indicating that SECR has succeeded in making energy and carbon reporting standard practice. It also estimated non-compliance at between 14% and 23%.
The main criticism was about how the regime is used. The review found that businesses tend to treat SECR as a compliance exercise rather than a strategic tool, and that they regard forward-looking frameworks as more useful for actual decision-making. SECR requires organisations to report what they used last year; it does not ask what they intend to do next.
The review’s recommendation is that SECR should be retained, with targeted amendments including:
- Clearer guidance on eligibility and group reporting boundaries
- A standardised disclosure template
- Better alignment of definitions and metrics with ISSB, CSRD and TCFD, to reduce duplication
- Optional forward-looking elements
- Centralised digital access to disclosures
These are recommendations rather than decisions. Any changes would be subject to consultation, and the government has indicated that its wider approach to sustainability reporting will be taken forward through the Modernising Corporate Reporting programme.
Where UK Sustainability Reporting Standards fit in
Running alongside the SECR review, and separate from it, is a new framework. The UK Sustainability Reporting Standards, UK SRS S1 and S2, were published on 25th February 2026.
- UK SRS S1 sets out general requirements for disclosing sustainability-related financial information: governance, strategy, risk management, and metrics and targets.
- UK SRS S2 covers climate specifically, requiring disclosure of Scope 1, 2 and 3 emissions, climate resilience and scenario analysis.
The standards were published for voluntary use in the first instance. The FCA consulted on making UK SRS-aligned reporting mandatory for listed companies (CP26/5), with a policy statement targeted for autumn 2026 and rules proposed to take effect from 1st January 2027. Scope 3 disclosure would carry one year of transitional relief, after which it applies on a comply-or-explain basis.
Government is expected to consider extending requirements to other entities through the Modernising Corporate Reporting programme.
What this means if you are not a listed company
Most mid-sized UK businesses will not be directly in scope, at least initially. The indirect effect is more significant.
UK SRS S2 requires in-scope companies to disclose Scope 3 emissions, the emissions in their value chain, which includes their suppliers. As larger customers begin reporting against the standard, they will need emissions data from the businesses they buy from.
In practice, that means more requests for energy and carbon data arriving through procurement rather than sustainability teams, often with a deadline and a contract attached. Organisations that produce emissions figures once a year for the Directors’ Report may find that annual rhythm no longer matches what their customers are asking for.
Practical steps to take now
Continue to comply as normal. The review recommended retaining SECR. Nothing has changed for your current reporting year.
Build a baseline you can defend. If optional or mandatory forward-looking elements are introduced, you will need a credible starting point and a trajectory. Both are considerably easier to produce from continuous data than from a series of annual snapshots.
Prepare for supply chain data requests. Consider which of your customers are likely to be in scope for UK SRS, what they are likely to ask for, and how quickly you could respond.
Collect the data once. Most organisations in SECR scope are also in ESOS scope, and increasingly complete customer sustainability questionnaires as well. All three draw on the same underlying consumption data. Gathering it properly once is significantly less work than assembling it separately each time.
How energy monitoring software supports SECR compliance
The most time-consuming part of SECR is rarely the calculation. It is the data gathering: chasing invoices, reconciling meter reads, filling gaps and reconstructing a year of consumption in the weeks before the accounts are signed off.
Enerlytic removes that pressure by collecting the data continuously throughout the year:
- Automatic collection of electricity, gas and water consumption data across all your sites and meters.
- Emissions calculations for the energy we monitor: Scope 2 for your electricity and Scope 1 for your gas, with conversion factors and methodology recorded so your disclosure is auditable. Transport fuel and any other Scope 1 sources are reported alongside to complete your SECR figure.
- Intensity ratios calculated against the normalising metric you choose.
- Year-on-year comparatives produced automatically, so prior year figures are consistent and always available.
- A continuous baseline, the foundation for any target-setting, whether voluntary or required.
- Evidence for your energy efficiency narrative, showing what actually changed after an intervention rather than what was expected to.
- One dataset supporting SECR, ESOS, carbon reporting and customer questionnaires, rather than a separate exercise for each.
Summary: SECR action checklist
- Confirm your scope: quoted company, large unquoted company or large LLP? Apply the two-of-three test to your latest accounts.
- Re-check your size classification: the Companies Act thresholds rose in April 2025, but the SECR thresholds did not.
- Check the low energy user threshold: at 40 MWh, most organisations meeting the size criteria will exceed it.
- Include transport fuel: fleet fuel and reimbursed business mileage are frequently missed.
- Write a genuine efficiency narrative: if no action was taken, that has to be stated, which is a good reason to make sure something was.
- Watch the Modernising Corporate Reporting programme for how the SECR review’s recommendations are taken forward.
- Track UK SRS: the FCA policy statement is expected in autumn 2026. Even if you are out of scope, your customers may not be.
- Fix the data collection once: continuous monitoring turns SECR from an annual project into an annual export.
SECR reporting due? Enerlytic can handle it for you. We automate your energy data collection and emissions calculations, produce your SECR report, and give you the continuous baseline you’ll need as reporting requirements evolve. Book a free 30-minute demo at www.enerlytic.co.uk, or get in touch to find out more about our SECR reporting service.
