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Most UK businesses get SECR compliance wrong—and it’s costing them. Your reporting obligations hinge on two critical factors that separate those who comply seamlessly from those facing penalties. Discover whether your organisation truly needs to report, and why the difference between quoted and unquoted companies matters far more than you think.
Quoted Companies: Automatic SECR Reporting Scope
If your company’s shares trade on a UK public stock exchange, you’re automatically required to report your energy use and emissions—there’s no opting out.
This mandatory requirement applies to roughly 11,900 large UK businesses across all sectors, regardless of size. Your quoted company status triggers this obligation automatically.
Once you’re caught by this requirement, you’ll need to disclose energy consumption from electricity, gas, and transport globally, not just in the UK. The reporting covers Scope 1 (direct) and Scope 2 (indirect) emissions, plus Scope 3 where relevant. This integrated into annual financial reports ensures sustainability is considered alongside your financial performance. Our energy monitoring tools provide the advanced tracking necessary to gather accurate consumption data across all your operations. Working with a transparent energy broker can help identify cost reduction opportunities whilst you manage these reporting obligations.
You’ll then submit this data within your Directors’ Report to Companies House annually. Year-on-year comparisons become essential here, helping you track progress and demonstrate your commitment to the UK’s net zero goals by 2050.
This ongoing measurement shows stakeholders and regulators that you’re serious about meeting climate targets.
Unquoted Companies and LLPs: The Two-of-Three Test
You’ll need to meet at least two of three specific thresholds to fall under SECR reporting requirements as an unquoted company or LLP.
These criteria—annual turnover of £36 million, a balance sheet total of £18 million, or 250+ employees—aren’t options you can pick and choose from; you’re in scope if you hit any two of them.
Grasping which thresholds apply to your business helps you determine whether mandatory energy and carbon reporting’s now part of your compliance obligations. This applies to approximately 11,900 UK businesses across the country that meet the size criteria. Understanding your energy consumption through data insights and analysis can support your approach to meeting these regulatory requirements, and implementing customised energy efficiency solutions can help demonstrate your commitment to reducing operational costs whilst meeting compliance obligations.
Understanding The Three Criteria
Understanding The Three Criteria
Three specific measurements determine whether your unquoted company or LLP must comply with SECR reporting requirements.
You’ll need to meet at least two of these three criteria. First, your annual turnover must reach £36 million or more. Second, your balance sheet total must exceed £18 million in assets. Third, you must employ 250 or more workers.
Think of it like a qualifying test—hitting any two boxes means you’re in.
These thresholds apply exclusively to UK-incorporated organisations, which means they’re designed consistently across different reporting structures to ensure fairness. Large unquoted companies and large LLPs meeting these thresholds are required to report UK-only energy use at minimum, including gas, electricity and transport activities. Our data-driven energy analysis helps businesses understand their reporting obligations and identify opportunities for compliance efficiency. Tailored compliance audit preparation enables organisations to assess current energy usage and identify gaps before formal reporting deadlines.
Around 11,900 UK businesses currently fall under SECR compliance through these measurements.
Meeting Two Thresholds Triggers Compliance
Now that you know the three criteria, it’s time to grasp how they actually trigger your compliance obligations. Here’s the key: you don’t need to hit all three thresholds. Instead, meeting just two of the three automatically classifies your unquoted company or LLP as “large” for SECR reporting purposes.
This two-of-three test creates clarity. You might exceed £36 million in turnover and employ 250+ staff—that’s enough. Or perhaps your balance sheet totals £18 million whilst you hit the employee threshold. Either combination activates your mandatory reporting duties. Companies pursuing B Corp certification demonstrate commitment to verified social and environmental standards whilst meeting these compliance requirements.
Think of it as a definitive compliance trigger. The moment you cross two thresholds within your reporting period, you’ve established clear regulatory limits. You’re now required to disclose UK energy use and associated greenhouse gas emissions data, supported by tailored energy management strategies that help optimise your consumption and reduce costs. Charities and non-profits that qualify as “large” under the Companies Act 2006 are equally subject to these same compliance requirements.
The £36 Million Turnover Threshold
When your company’s annual turnover hits £36 million or more, you’ve crossed an important line in the UK’s energy reporting world. This threshold matters because it’s one of three financial metrics determining whether you’re classified as “large” under SECR regulations. You’ll need to meet at least two of the three criteria—turnover, balance sheet total, or employee count—to trigger compliance obligations.
What makes this benchmark particularly useful is its consistency. Whether you operate as a quoted company, unquoted company, or Limited Liability Partnership, the same £36 million figure applies across the board. Your qualification status gets reassessed annually within each financial reporting period, so you’ll want to keep a close eye on where you stand each year. Large company status must be maintained for two consecutive periods before full reporting obligations take effect, allowing you time to prepare your data systems accordingly. Understanding your energy consumption patterns during this preparation phase can support energy efficiency upgrades that reduce operational costs and align with environmental responsibility commitments.
This threshold was established when SECR regulations launched in 2018, and it’s helped ensure that larger organisations track and report their energy consumption transparently. If your turnover crosses £36 million alongside meeting one additional metric—whether that’s balance sheet total or employee count—you’re joining thousands of UK businesses committed to genuine energy accountability. It’s a meaningful step towards understanding and managing your organisation’s environmental impact.
The £18 Million Balance Sheet and 250-Employee Thresholds
Beyond the £36 million turnover threshold, your organisation faces two additional financial metrics that work together to determine SECR compliance. Think of these as a pair of gates that both need to open for mandatory reporting to kick in.
Your balance sheet total hitting £18 million represents the first gate. The second gate opens when you employ 250 or more full-time equivalent staff. Here’s the critical bit: you need both thresholds to trigger your reporting obligations. Meeting just one won’t land you in the mandatory reporting category.
This dual-threshold system applies specifically to unquoted companies and Large Limited Liability Partnerships. You’ll need to assess both metrics on an annual basis to stay compliant. If you’re edging closer to either limit, get your numbers verified early. Many compliance issues stem from businesses not keeping pace with their own balance sheet growth or making errors when counting headcount during periods of recruitment or restructuring.
Why You Can’t Meet Just One Threshold
exceeding one threshold spectacularly won’t get you off the hook for SECR reporting.
You might think hitting £40 million in turnover means you’re done. You’re not. The regulations require you to meet two of three criteria simultaneously:
- Annual turnover of £36 million or more
- Balance sheet total of £18 million or more
- Employee headcount of 250 or more workers
Let’s say you’re a £50 million company with only 180 employees and £12 million in assets. You’ve failed the test, which means you’re exempt from SECR obligations entirely. That single massive figure in turnover doesn’t matter because you haven’t crossed the other thresholds.
The dual-criterion approach deliberately distinguishes genuinely large organisations from those with single dimensions of scale. A company can be enormous in one respect—turnover, assets, or headcount—but that alone doesn’t trigger reporting requirements. You need genuine scale across multiple measures.
This structure applies uniformly across all UK business types, and there are no exceptions. Meeting just one threshold, regardless of how dramatically you exceed it, leaves you outside mandatory reporting requirements.
If Your Organisation Is in the Public Sector
If you’re in the public sector, you’re likely exempt from direct SECR requirements, but don’t assume you’re off the hook entirely—you’ll still need to follow alternative carbon reporting rules that apply to your organisation.
You should assess whether any subsidiaries or private entities within your group structure meet the SECR thresholds (turnover over £36 million, assets exceeding £18 million, or more than 250 employees), since they might trigger separate reporting obligations.
Aligning your methodology with the latest Environmental Reporting Guidelines guarantees you’re meeting both your sector’s specific compliance needs and any applicable SECR standards for relevant parts of your organisation.
Public Sector Eligibility Assessment
Since public sector organisations operate under different governance structures than private companies, you’ll need to assess your eligibility for SECR reporting using modified criteria.
Your assessment involves evaluating these key factors:
- Organisation type – Determine whether you’re an NHS trust, local authority, public body, or government entity
- Size thresholds – Apply adjusted financial metrics specific to public sector classifications
- Governance structure – Consider how your organisation’s reporting lines affect SECR obligations
- Exemptions and modifications – Review sector-specific exceptions that may reduce or eliminate your reporting requirements
Many public sector organisations face similar challenges around energy transparency and accountability. Understanding where you fit within SECR’s framework helps you prepare proactively rather than scrambling at deadline.
Your specific organisation type ultimately determines which pathway you’ll follow, and getting this right from the start makes the entire process smoother. Once you’ve identified your classification, the subsequent requirements become much clearer to navigate.
Aligning Reporting Methodology Standards
Getting your emissions reporting right requires you to adopt standardised methodologies that’ll make your data accurate, comparable, and credible. As a public sector organisation, you’ll reference the Environmental Reporting Guidelines (ERG) Chapter 2 as your primary source—it’s specifically designed for UK public bodies like yours.
Start by combining the GHG Protocol Corporate Standard with DEFRA’s emission conversion factors. This dual-compliance approach ensures your calculations reflect UK energy grid composition whilst maintaining international consistency. It’s the foundation that keeps your reporting both locally relevant and globally recognised.
From there, you’ll work through the three scopes of emissions classification. Scope 1 covers the direct sources you control—think fuel combustion or fleet vehicles. Scope 2 then brings in your purchased electricity and heating, recognising the emissions generated to supply your energy needs. Finally, Scope 3 captures the indirect supply chain emissions that ripple through your operations, from waste disposal to business travel.
This structured approach matters because following ERG guidance positions your organisation as credible and accountable. You’re joining your peers in committing to transparent, standardised reporting that genuinely drives change. It’s not just about compliance—it’s about demonstrating real environmental responsibility.
Mandatory Compliance Obligations Overview
Public sector organisations operate under a distinctly different compliance structure than their private sector counterparts. Whilst you’re exempt from SECR regulations, you’re not exempt from carbon reporting—you simply follow alternative frameworks instead.
Your mandatory obligations include:
- Reporting under separate public sector legislation tailored to government, NHS, and local authority needs
- Disclosing energy consumption and emissions data through designated reporting channels specific to your sector
- Complying with distinct carbon tracking standards established outside the SECR structure
- Meeting regulatory requirements enforced by alternative oversight bodies rather than the Financial Reporting Council
This separation acknowledges your unique operational circumstances. Because public organisations operate differently from private businesses, the regulatory framework recognises these distinctions and creates pathways designed specifically for how you work.
At the same time, this doesn’t mean you step away from environmental accountability. You still need to track and report your environmental impact responsibly—it just happens through channels and mechanisms built for the public sector rather than commercial enterprises.
The result is a clearer compliance pathway that fits your sector’s reality whilst maintaining the transparency and measurement standards the public rightly expects.
