Streamlined Energy and Carbon Reporting has been mandatory for large UK companies since April 2019. Despite this, SECR disclosures vary enormously in quality — some are thorough and investor-grade, others are technically non-compliant. Here is a plain-English guide to who qualifies, what the disclosure must contain, and the mistakes we see most often.
Who must report under SECR
SECR applies to quoted companies of any size, and to large unquoted companies and LLPs that meet at least two of the following three criteria: 250 or more employees, annual turnover of £36 million or more, annual balance sheet total of £18 million or more.
Qualification is assessed at the legal entity level for unquoted companies — unlike ESOS, which is assessed at group level. This means a large unquoted subsidiary may qualify independently of its parent.
Quoted companies — those listed on the London Stock Exchange Main Market, AIM, or equivalent — must report regardless of size.
What the disclosure must contain
For large unquoted companies and LLPs, the mandatory elements are:
UK energy use in kWh for the reporting year, covering electricity, gas, and transport fuel used in the UK.
Scope 1 and Scope 2 greenhouse gas emissions in tonnes of CO₂e, calculated using DEFRA UK Government GHG Conversion Factors for the reporting year.
An intensity metric — a ratio of emissions or energy use to an appropriate business metric such as revenue, headcount, or floor area.
A description of the principal energy efficiency measures taken during the year.
A prior year comparator for energy use and emissions.
Quoted companies must additionally disclose global emissions including Scope 1, Scope 2, and at least one Scope 3 category.
The conversion factor question
DEFRA publishes updated UK Government GHG Conversion Factors annually, typically in June. The factors for electricity generation change each year as the grid decarbonises. This means that a company's Scope 2 emissions can change significantly year on year even if electricity consumption is unchanged — purely because the grid has become cleaner.
This creates a prior year comparability issue that must be handled carefully in the disclosure narrative. Companies should disclose which year's conversion factors were used and, where the change is material, restate the prior year on a like-for-like basis.
Dual Scope 2 reporting
Companies that purchase renewable electricity under a Power Purchase Agreement or hold Renewable Energy Guarantees of Origin can report a market-based Scope 2 figure alongside the standard location-based figure. The location-based figure uses the grid average conversion factor; the market-based figure uses the specific factor associated with the renewable tariff or certificate.
SECR does not require dual reporting but it is increasingly expected by investors and lenders as evidence that renewable procurement claims are substantiated. We include both figures as standard in our SECR disclosures.
The most common mistakes
Incomplete energy boundary: Many disclosures cover purchased electricity and gas but omit grey fleet mileage, company vehicle fuel, and refrigerant losses. All of these are Scope 1 or Scope 2 and must be included where material.
Wrong conversion factors: Using last year's DEFRA factors, or applying the wrong factor to the wrong fuel type, is surprisingly common — particularly for transport fuels where the factors differ by vehicle type and fuel.
No intensity metric: The intensity metric is mandatory but is frequently omitted or calculated inconsistently between years, making trend analysis meaningless.
Boilerplate energy efficiency narrative: The requirement to describe principal energy efficiency measures is often met with a generic paragraph that adds no information. A good disclosure names the specific measures taken, quantifies their impact where possible, and connects them to the organisation's broader energy and carbon strategy.
Missing prior year comparator: Required by the regulations but sometimes omitted where prior year data is unavailable. Where a prior year comparator cannot be provided, the reasons must be disclosed.
Using SECR as a foundation
The best SECR disclosures do more than meet the minimum requirements. They use the mandatory data collection as the foundation for a GHG Protocol-aligned carbon footprint, extend the boundary to include material Scope 3 categories, and connect the energy efficiency narrative to a credible net zero transition pathway. This turns a compliance obligation into a genuine ESG asset — one that supports investor relations, lender covenants, and supply chain sustainability requirements.
If your organisation qualifies for SECR and you want to make sure your next disclosure is accurate, complete, and investor-grade, speak to our team about our SECR reporting service.