SECR: What it means for businesses and how it will help improve energy efficiency

A new Streamlined Energy and Carbon Reporting (SECR) framework comes into effect from 1 April 2019, replacing the existing Carbon Reduction Commitment energy efficiency scheme. As part of the scheme, companies will need to report their UK energy use from electricity, gas and transport, and scope 1 and 2 greenhouse gas emissions on an annual basis. In addition, these companies will have to report their intensity ratio, which is a measure of the energy inefficiency within a company.

The new framework is a part of the Government’s plan to make energy and carbon reporting simpler for businesses, while also helping them find ways to improve their energy usage.

According to Carbon Trust, around 12,000 companies will need to comply with the new SECR framework. These include quoted companies, large limited liability partnerships, and large unregistered companies that currently produce directors’ reports under the Unregistered Companies Regulations 2009. Some UK registered unquoted large companies will also need to demonstrate SECR compliance. You can find out more about which companies qualify for the scheme here.

We speak to Chris Wilson, Energy Optimisation Manager at SSE Enterprise Energy Solutions about what it means for customers, how it could improve energy efficiency and how customers can combine it with other regulations for maximum effect.

CRC is ready for replacement

According to Chris, SECR is a welcome change and will replace what is, in CRC, an “onerous system that seems separate to other energy efficiency measures and doesn’t talk to other processes”. For Chris, this is an example of a system that hasn’t quite panned out the way the industry expected – the idea was to benchmark against other companies to give an idea of how energy efficient a company was. In the end, however, this amounted to a single company league table which was produced in the first year.

Greater synergies with existing reporting requirements

In introducing SECR, part of the Government’s aim is to create better synergies with existing reporting within companies. Chris thinks this will help to cut down on associated admin by enabling companies to repurpose some of their current reports.

“SECR simply beefs up established reporting and allows for companies to submit reports in a similar way to how they currently do with Companies House,” he explains. “Many of the firms who fall under SECR’s remit will already have robust systems in place.”

SECR should also help boost transparency within businesses, as stakeholders will be able to view where and how companies are using energy. This transparency should also benefit the businesses themselves as they will be able to see how inefficient use of energy costs them money.

“With the cost of energy on an upward trajectory, transparency will become increasingly important,” says Chris, “and should help to establish what companies are actually spending on energy and help them align costs.”

Data at your fingertips

To meet the scope of the framework, good quality energy data is essential. There are a number of tools available to help customers capture their data and turn it into effective reports, including SSE’s energy management platform, Clarity, which can help customers develop an export report.

“This data capture is useful for customers looking to improve their energy efficiency; after all, what you can’t measure, you can’t manage,” says Chris.

“And there are other benefits to gathering high quality data. It can translate into cost savings and reduced risk, as firms will be able to look at the data and consider changes they could make. These could range from anything from simply remembering to turn off lights in the evening, to upgrading a building management system and could help bring effective returns on investment,” says Chris.

“But crucially, it should help make the energy efficiency story easier to tell: it helps bring the data to life and demonstrate to employees the benefits of cutting waste.”

What if you’re not ready yet?

With just under a month to go, SECR will come around quickly. But according to Chris, if your firm hasn’t started planning yet, don’t despair.

“While SECR comes into effect in April 2019, reporting won’t actually begin until 2020. Until then, we’ll be in the data gathering stage. The good news is that most firms who need to be SECR compliant will already have systems in place to capture this data – it’s just about ensuring it’s in an adaptable format,” he explains. “If you already submit data to Companies House, the overwhelming likelihood is that you’ll be able to adapt much of this data for SECR purposes.”

Overlap with other regulations

SECR also aligns well with other existing regulations, according to Chris.

“Look at ESOS,” he says, “which, in essence, is an audit carried out every four years. But now that SECR requires you to report annually, firms can run the data on a more regular basis and this can make recommendations generated by an ESOS auditor more relevant.” You can read more about ESOS in our recent blog.

Another regulation it dovetails with is ISO 50001, which requires qualifying firms to demonstrate how they are optimising their energy usage and asks them to ratify their claims. “There’s clearly going to be a strong correlation between good data and the ability to identify changes and put these into action,” Chris explains. “It also requires buy-in from senior managers, thus raising the profile of energy efficiency further.”

Therefore, businesses who put robust reporting in place are in a good position to improve their own energy efficiency. By using their data to gather energy usage insights, companies can make their energy use more transparent for stakeholders.

For more on your energy needs, get in touch with your account manager or contact us here.

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