Streamlined energy and carbon reporting (SECR) requires quoted companies, large unquoted companies and large LLPs to report their energy use in kWh, the related greenhouse gas emissions, at least one intensity ratio, their energy efficiency actions and the methodology used. Companies put this in the directors’ report and LLPs in a separate energy and carbon report. The size test for unquoted companies and LLPs uses its own thresholds, which were not raised when the Companies Act size limits went up in April 2025.
Who has to report under SECR?
The rules are in Schedule 7 to the 2008 accounts regulations for large and medium sized companies (SI 2008/410), inserted for unquoted companies and LLPs by the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 from 1 April 2019. Government guidance confirms the requirements apply to reporting years starting on or after that date. Three groups are in scope:
- Quoted companies (Part 7 of Schedule 7). Under section 385 of the Companies Act 2006, a quoted company is one whose equity share capital is on the UK official list, officially listed in an EEA State, or admitted to dealing on the New York Stock Exchange or Nasdaq. There is no size test.
- Unquoted companies (Part 7A), unless exempt under paragraph 20B or, for a parent, paragraph 20C.
- LLPs, through regulation 12B of the LLP (Accounts and Audit) Regulations 2008, which requires the members to prepare an energy and carbon report unless the LLP is exempt on the same size basis.
Small companies are outside the regime altogether, because regulation 2(4) of the 2008 Regulations says they apply only to companies that are not subject to the small companies regime.
How does the size test work, and why can a medium sized company be caught?
Under paragraph 20B, an unquoted company that is not a parent is exempt if it meets at least two of these conditions: turnover of not more than £36 million, balance sheet total of not more than £18 million and not more than 250 employees. Paragraph 20C applies the same test to a parent on aggregate group figures, with gross alternatives of £43.2 million turnover and £21.6 million balance sheet total. A two year rule applies, so a company’s status changes only when it meets or fails the conditions in two consecutive years. LLPs use identical figures under the modified section 415A.
These figures sit in the SECR regulations themselves. The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 raised the Companies Act medium sized limits under section 465 to £54 million turnover and £27 million balance sheet total from 6 April 2025, but did not amend paragraphs 20B and 20C. A company can therefore be medium sized for accounts purposes and still need SECR disclosures.
Illustration only. An unquoted company has turnover of £40 million, a balance sheet total of £20 million and 200 employees, and has had similar figures for several years. Under section 465 it meets the turnover and balance sheet tests and is medium sized. Under paragraph 20B it meets only the employee test, so it is not exempt, and its directors’ report must contain the SECR disclosures.
What must the report contain?
The content differs between quoted and unquoted companies.
| Requirement | Quoted company (paragraphs 15 to 19) | Unquoted company or LLP (paragraphs 20D to 20J) |
|---|---|---|
| Direct emissions | Tonnes of carbon dioxide equivalent from activities it is responsible for, including combustion of fuel and operation of any facility | Tonnes of carbon dioxide equivalent from combustion of gas and consumption of fuel for transport |
| Indirect emissions | From purchased electricity, heat, steam or cooling for own use | From purchased electricity for own use, including for transport |
| Energy use | Aggregate kWh, with the proportion in the UK and offshore area | Aggregate kWh; may exclude energy consumed outside the UK |
| Other content | Principal energy efficiency measures taken in the year; methodologies used; at least one intensity ratio; prior year figures (except in the first year); the reporting period if it differs from the financial year | |
An intensity ratio expresses annual emissions against a quantifiable factor associated with the business, such as £1 million of turnover, units produced or, for offices and shops, floor space, which the guidance gives as examples. The government guidance also says large unquoted companies and LLPs must include emissions from business travel in rental cars or employees’ own vehicles where the company is responsible for purchasing the fuel, while other indirect (Scope 3) emissions remain voluntary but strongly encouraged where material.
Are there any exemptions inside the regime?
- Low energy users. Nothing has to be disclosed if the company used 40,000 kWh or less in the period (for an unquoted company, in the UK), provided the report states that the information is not disclosed for that reason.
- Seriously prejudicial. Information may be withheld if, in the directors’ opinion, disclosure would be seriously prejudicial to the company’s interests, again with a statement. The guidance expects this to be very rare and says it may be questioned by the Financial Reporting Council.
- Not practical to obtain. The requirements apply only so far as it is practical to obtain the information, but the report must say what has been left out and why.
How do groups and subsidiaries report?
Under paragraph 20E, a group directors’ report covers the parent and its subsidiaries included in the consolidation that are quoted companies, unquoted companies or LLPs. The parent may leave out information about a subsidiary that the subsidiary would not have had to report on its own.
A subsidiary does not need its own SECR disclosures if, at its year end, it is included in the group report of a parent prepared for a year ending at the same time or earlier, and that group report complies with the SECR rules other than by relying on the seriously prejudicial exemption (paragraph 20A(2) and paragraph 15(1A)). How group reports are prepared depends first on whether group accounts are required; see when a parent must prepare group accounts.
How are the figures calculated and where do they go?
The government’s Environmental Reporting Guidelines, published in March 2019, explain the methods, scopes and intensity ratios. Emissions are normally calculated by applying the UK government conversion factors for company reporting to activity data such as kWh of gas and electricity and fuel or mileage for vehicles. A new set of factors is published each year, and the 2026 set was published in June 2026. Whichever factors and approach are used, the methodology must be stated.
For companies, the disclosures form part of the directors’ report, which is approved by the board and filed with the accounts; see what goes in a directors’ report. For LLPs, the energy and carbon report must state the names of the members during the year and the designated member signing it, and members who fail to take reasonable steps to secure its preparation commit an offence. LLP filing more generally is covered in LLP filings at Companies House.
SECR is about energy and emissions data. The largest companies also have to make climate related financial disclosures in the strategic report, which deal with risks, strategy and scenarios; see climate related financial disclosures.
Is SECR going to change?
Possibly, but nothing has changed yet. The government published a post implementation review of the SECR regulations in May 2026, which found that SECR had improved transparency and consistency and identified areas that could be simplified. Separately, Companies House guidance records the government’s 21 October 2025 announcement that it intends to remove the requirement to prepare a directors’ report, and the government’s proposals say energy emissions reporting would be relocated elsewhere in the annual report. The Modernising corporate reporting consultation is open until 30 November 2026. Until new legislation is made, the current rules apply.
What mistakes come up most often?
- Assuming that a company which is medium sized after April 2025 is outside SECR.
- Forgetting transport fuel, including mileage in employees’ own cars where the company pays for the fuel.
- Omitting the intensity ratio, the methodology statement or the prior year comparatives.
- Relying on the low energy exemption without stating it in the report.
- A subsidiary omitting disclosures when its parent’s group report has a later year end or does not cover it.
- Using last year’s conversion factors without saying so.
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Sources
- legislation.gov.uk: SI 2008/410, schedule 7
- GOV.UK: Environmental reporting guidelines including mandatory greenhouse gas
- legislation.gov.uk: Act 2006 c. 46, section 385
- legislation.gov.uk: SI 2008/410, schedule 7
- legislation.gov.uk: SI 2008/410, schedule 7
- legislation.gov.uk: SI 2008/410, schedule 7
- legislation.gov.uk: SI 2008/410, schedule 7
- legislation.gov.uk: SI 2024/1303, regulation 5
- legislation.gov.uk: Act 2006 c. 46, section 465
- legislation.gov.uk: SI 2008/410, regulation 2
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.