SECR Streamline Energy and Carbon Reporting

New Environmental Reporting and Taxation Framework Still a SECRet to Most UK Businesses

Conceived to reduce administrative burdens, raise awareness of energy efficiency, reduce bills, and save carbon, the Streamline Energy & Carbon Reporting (SECR) is a new, mandatory reporting regime that will replace Carbon Reduction Commitment (CRC) and greenhouse gas (GHG) reports. As a public document, SECR will show what companies are, or are not doing, to reduce their emissions. Any failure to address the rising cost of fuel through reduced use will be clear to see. The report will also show how companies are reacting to the risk of climate change, so there will, for the first time be an additional reputational risk if any organisation fails to reduce its emissions to counter climate change.    

Does SECR apply to your business?

A large number of companies and Limited Liability Partnerships (LLPs) will be required to report as part of SECR. The framework is mandatory for ‘large’ companies (under the Companies Act 2006) that meet two of three set benchmarks:

  • More than 250 employees
  • More than £36 million in annual turnover
  • An annual balance sheet larger than £18 million

SECR would extend the number of companies that report information in annual reports from ~1,200 to ~11,900, similar to the Energy Savings Opportunity Scheme (ESOS) organisational reporting. This is also a climb from the ~4,000 companies currently required to comply with CRC regulations.

The suggested vehicle for reporting is company accounts and a UK-wide approach is in line with other existing initiatives such as ESOS and mandatory GHG reporting.

Organisational reporting will be similar to ESOS in that:

UK subsidiaries, that qualify for SECR in their own right, will not be required to report where they are covered by a parent’s group report, although they may report individually on a voluntary basis.

Companies that are not registered in the UK (non-UK incorporated) are not obliged to file annual reports at Companies House, and will, therefore, fall outside the scope of the mandatory SECR framework.

However, where a parent company is not registered in the UK, but has subsidiaries that are registered in the UK, these subsidiaries, if qualifying for SECR in their own right, would need to report.

It has already been announced that to compensate for the removal of approximately£790m in annual CRC tax revenues the Climate Change Levy (CCL) has been noted for increase in 2019.  SECR legislation has passed through Parliament into law and the mandatory report will be linked to taxations with the new the tax rates already set out:

Taxable commodity  Rate From
1 April 2018  
Rate From 1
April  2019 
Change
Electricity (£ per
kilowatt hour (kWh))
0.00583   0.00847 +45.28%
Natural gas (£ per kWh) 0.00203   0.00339   +67.00%
LPG (£ per kilogram) (kg) 0.01304 0.02175 +66.79%
Any other taxable
commodity (£ per Kg)
0.01591 0.02653 +66.75%

Climate Change levy Rates 2018-2019

Who is exempt?

  • De-minimis threshold of 40,000 kWh, for companies using low levels of energy to be exempt from reporting, similar to ESOS (this equates to approximately 500organisations).
  • Unquoted companies where it would not be practical to obtain some or all of the SECR information.
  • Disclosure of information which the Directors think would be seriously prejudicial to the interests of the company.
  • There is no exemption for energy used in other schemes – e.g. Climate Change Agreements(CCA) / EU-Emissions Trading Scheme (ETS).
  • There is no exemption for Limited Liability Partnerships (LLPs), as they are required to report under SECR through an equivalent to a directors’ report (this equates to approximately 230 large LLPs).
  • Public sector organisations are currently exempt, but there is an expectation that they will adopt SECR as a standardised environmental planning and reporting tool.

UK quoted companies registered in the UK will be required to: 

  • Where practical, disclose Scope 1 & 2 emissions according to the GHG methodology (Scope 3 will remain voluntary). Electricity, gas and transport will as a minimum require reporting and an intensity metric is required in their annual reports which, where practical, will also report on global energy use.
  • Provide a narrative commentary on energy efficiency action taken in the financial year, though they won’t be required to specifically disclose ESOS recommendations and how they have been taken forward (although they can do so). This will apply to both quoted, large unquoted companies, and large LLPs. The idea behind disclosing annual energy efficiency actions is to incentivise action outside the four-yearly ESOS cycle.
  • Having completed the report it will need to be audited to a standard that meets the requirements of the Financial Reporting Council (FRC) and be signed off by the Board. For private companies the report must be registered with Companies House.

Organisations will report under the CRC for the last time at the end of July 2019 and surrender allowances for emissions from energy supplied in the 2018-19compliance year by the end of October 2019. The new tax will be collected as part of the Climate Change Levy payments by an organisation’s supplier.

Adveco mCHP servicing

Keeping Business Critical Hot Water Flowing

Ensuring consistent operations and prolonging life of a commercial hot water and heating system should be a key factor when specifying and costing out these business critical systems. That process begins with commissioning. This choice falls to the customer, but Adveco advises that it should be engaged to commission A.O. Smith and its own branded appliances. This ensures product warranty commences from the date of commissioning, rather than date of delivery which may be months before a system eventually goes live. If not commissioned by Adveco, it will also fall to the customer to fault find, order the new part and return the faulty part, which can be a painful, time consuming process for any facility manager who is already “time poor”.

To support consistent operations, we specialise in both commissioning and proactive service to the manufacturer’s recommendations. Reactive service providers will only check gas pressures and overall condition, they will then wait for breakdowns and call outs. We want to ensure any downtime of business-critical hot water is absolutely minimised. Operating vehicles fully stocked with authorised parts, we can replace in a single visit consumable parts or address any issues before critical failure, to leave a unit in optimal condition for the coming year.


Adveco - Commercial hot water systems.For mission-critical commercial hot water systems, speak to Adveco.

Call us on 01252 551 540 or see further ways to contact us.

CIBSE Patrons

Adveco Joins CIBSE Patrons

Adveco is proud to announce it has increased its support of CIBSE, following acceptance as the latest CIBSE Patron. CIBSE Patrons are a group of businesses who collaborate to give financial, technical and moral backing to a wide range of initiatives led by the Institution.

With sustainability sitting at the core of our business, from product to bespoke systems, and CIBSE Patrons’ primary focus on improving recruitment and retention of engineers within the industry, Adveco aligns well with the group’s remit. Our experience, alongside a CIBSE approved CPD training programme, puts us in a prime position to actively support with technical and commercial knowledge.

Scott Mason, UK sales manager, Adveco said;

“By joining one of the most influential cross-industry networking body within building services engineering, Adveco is better positioned to share its engineering excellence and experience with CIBSE members – from the well-established to those young engineers looking to progress within the industry.”


 

Adveco supports CIBSE Young Engineers Network

Adveco supports Young Engineers Network

Adveco/A.O. Smith Water Heaters is pleased to be able to provide some winter cheer in support of CIBSE Young Engineers Network. We are sponsoring the seasonal gathering at The Winter Forest at Broadgate, London on 12th December in celebration of a great year of engineering. We look forward to seeing you there and wish all the young engineers attending a very merry Christmas.

CIBSE YEN members can still register to attend this popular get together.