Most companies think they’re exempt from SECR. They’re wrong. Whilst the 40,000 kWh loophole exists, quoted companies and large unquoted firms face mandatory Scope 1 and 2 emissions reporting—and the consequences of getting it wrong are severe. Discover which category your business falls into and why your current reporting strategy might already be obsolete.
Does Your Company Need to Comply With SECR?
While SECR sounds like something that’d only affect massive corporations, the reality hits closer to home for a lot of businesses. We’re talking about 11,900+ organisations caught in this net.
SECR isn’t just for corporate giants—over 11,900 businesses are already caught in its requirements.
Here’s the deal with company size. You’re likely on the hook if you hit two of these three reporting triggers: £36 million annual turnover, £18 million balance sheet total, or 250 employees. That’s it. Not exactly “massive corporation” territory. Working with specialists in energy compliance can help ensure your organisation meets these thresholds accurately.
Quoted companies? You’re in regardless of size. No exceptions. These UK-incorporated companies listed on a regulated market must report global energy use and GHG emissions.
Large unquoted companies and LLPs meeting those thresholds? Also in. Even some nonprofits aren’t safe if they hit the criteria. A compliance audit can identify gaps in your regulatory adherence and provide recommendations for alignment with required standards. However, public sector organisations are excluded from SECR requirements entirely.
The kicker? This structure replaced the old CRC scheme and pulled in roughly 8,000 additional businesses. Surprise.
SECR Exemptions: The 40 MWh Threshold and Other Exceptions
Not every business that technically qualifies as “large” actually has to file full SECR reports. Here’s the deal: if your organisation uses less than 40,000 kWh during the reporting period, you’re off the hook. That’s 40 MWh for those keeping score.
But don’t get too excited. You still need to state your low-energy user status in your Director’s Report. No complete disappearing act allowed. Starting with a baseline energy audit helps establish whether your consumption genuinely qualifies for this exemption. Implementing real-time reporting during your audit process can provide immediate insights into your actual energy consumption patterns.
Public bodies? They’re exempt too, though they’ve got other carbon reporting rules to follow. And if you’re a subsidiary covered in your parent company’s group report, you won’t need separate energy audits or filings. This applies even if the subsidiary would otherwise qualify as large, since subsidiaries included in a parent group report are not required to file separately.
Got commercially sensitive data? There are sensitive exemptions available, but you’ll need to prove disclosure would actually hurt you competitively. It’s not automatic. Charities, not-for-profits, and academies aren’t automatically exempt and must check qualifying criteria to determine whether SECR requirements apply to them.
What Quoted and Unquoted Companies Must Report Under SECR
Because your company’s stock trades on a regulated market, SECR doesn’t care how small you are. You’re in. No turnover minimums. No employee thresholds. Just global disclosures—every single year.
Unquoted companies? Different story. You’ll only report if you hit two of three criteria: turnover over £36 million, balance sheet exceeding £18 million, or 250-plus employees. And here’s the kicker—you’re only responsible for UK-based emissions.
Both groups must report Scope 1 and Scope 2 emissions in tonnes of CO₂ equivalent. Total energy consumption in kWh. An intensity ratio tied to something meaningful, like revenue. By optimising your energy consumption patterns, you can reduce the absolute figures reported and demonstrate meaningful progress towards sustainability goals.
What about Scope 3? Voluntary. But there’s strong scope 3 encouragement from regulators. They really want you to go further.
Second year onwards, you’ll need prior-year comparatives. So keep those records handy.
To optimise your energy reporting and identify cost reduction opportunities, consider conducting a comprehensive energy audit with a transparent broker to ensure your consumption data is accurate and your supplier terms are competitive.
Where SECR Disclosures Go in Your Directors’ Report
Once you’ve got your SECR data together, you need to know where it actually goes. For most companies, that’s your directors’ report. Simple enough.
SECR data belongs in your directors’ report—it’s that straightforward.
But here’s where it gets interesting. Strategic placement matters. You can actually put this stuff in your strategic report if the information feels, well, strategic. Just make sure you’re cross referencing back to your directors’ report. Many quoted companies already do this.
Your filing location? Companies House. No special repository exists. It all flows through your standard annual report process.
Why bother thinking about placement? Stakeholder visibility. Investors read annual reports. They expect to find climate disclosures there. Placing SECR info alongside your section 172(1) statements creates a coherent story about governance. A comprehensive approach to energy management through energy efficiency audits and monitoring systems strengthens the credibility of your climate disclosures. Working with energy consultants who specialise in compliance reporting support ensures your disclosures are accurate, audit-ready, and properly positioned within your annual report narrative.
LLPs? You’ll need a separate “Energy and carbon report.” Different rules apply.
SECR Deadlines and Penalties for Non-Compliance
Missing your SECR deadline isn’t some minor paperwork hiccup. It’s a legal requirement under the Companies Act. Full stop. Your filing timeline depends on your financial year, not some universal due date. So deadline alignment with your internal reporting schedule? That’s on you to work out.
Here’s where it gets real. Regulatory authorities can slap you with financial penalties. And penalty escalation becomes a genuine concern when you’re part of international supply chains or courting investors. They notice. Trust us.
Beyond the fines, there’s the reputation hit. Stakeholders lose confidence. Customers get sceptical. Potential investors? They walk. Your access to capital shrinks. Supplier relationships sour.
Proactive compliance with ISO standards and structured reporting frameworks can help you avoid these pitfalls entirely. Integrating real-time energy monitoring into your operations ensures accurate emissions data and streamlined compliance. Nobody wants to be the company that couldn’t get its emissions data together. That’s not a club worth joining.
