Explained: SECR and ESOS compliance
As a UK business owner, it is important to ensure that you are aware if your business has a legal obligation to comply with the Energy Savings Opportunity Scheme (ESOS) and Streamlined Energy and Carbon Reporting (SECR) regulations. These regulations are in place to help businesses reduce their energy consumption and carbon emissions, ultimately benefiting the environment and the economy.
ESOS requires large businesses to undertake energy audits every four years, identifying areas where energy savings can be made. SECR, on the other hand, requires businesses to provide annual reports on their energy consumption and carbon emissions. Both of these schemes are important for businesses to comply with, but they can also be quite complex.
ESOS compliance is not just a legal obligation; it also provides benefits for businesses. By identifying energy-saving opportunities, companies can reduce energy bills and improve profitability. It also helps businesses reduce their carbon footprint and meet their sustainability goals.
SECR compliance is critical in the UK because it helps organisations measure and reduce their carbon footprint. By reporting on energy consumption, greenhouse gas emissions, and other environmental factors, companies can identify areas to improve their sustainability practices. Similary, ESOS is a crucial scheme that helps businesses create an action plan to tackle their energy costs and lower their emissions.
Who needs to comply with ESOS and SECR?
For ESOS Phase 3, a large undertaking is any UK company that: employs 250 or more people. has an annual turnover in excess of £44 million, and an annual balance sheet total in excess of £38 million.
For SECR, the regulations require large unquoted companies that have consumed (in the UK), more than 40,000 kilowatt-hours (kWh) of energy in the reporting period to include energy and carbon information within their directors' (trustees') report, for any period beginning on or after 1 April 2019.
Even if your business doesn't meet the criteria for mandatory reporting, it's still a good idea to track your energy usage and report it voluntarily. This can help you identify areas where you can save money and reduce your carbon footprint.
So, how can UK businesses comply with ESOS and SECR? Here are some tips to get started:
Understand the regulations: It is important to understand the requirements of both ESOS and SECR, and how they apply to your business. This will help you to identify the steps you need to take to comply.
Collect data: To comply with both ESOS and SECR, you will need to collect data on your energy consumption and carbon emissions. This may involve gathering data from multiple sources, such as energy bills, vehicle usage, and travel logs.
Conduct energy audits: Large businesses are required to conduct energy audits under ESOS. These audits identify areas where energy savings can be made, such as upgrading equipment or improving insulation.
Report on energy consumption and carbon emissions: Under SECR, businesses must report on their energy consumption and carbon emissions annually. This information must be included in the company's annual report.
Take action: Once you have identified areas for improvement, it is important to reduce your energy consumption and carbon emissions. This may involve investing in energy-efficient equipment or implementing new policies and procedures.
Complying with ESOS and SECR can be a complex process. However, it is important for businesses to do so to reduce their environmental impact and contribute to a sustainable future. By following these tips, UK businesses can achieve compliance and a more sustainable future.
Speak to SRD for more advice on ESOS and SECR. We can help you with all your energy reporting requirements.
