The Streamlined Energy and Carbon Reporting (SECR) legislation has become a critical component of business sustainability strategies. According to the UK Government’s Net Zero Strategy, improving energy efficiency in commercial and industrial buildings could reduce emissions by 40 percent by 2030. This makes regulatory frameworks like SECR pivotal.Â
While the SECR scheme aims to enhance transparency, drive corporate energy efficiency, and support the UK’s net-zero ambitions, many organisations face challenges collecting accurate data. Continue reading as we explore the common hurdles faced by SECR data collection and share best practices for overcoming these bottlenecks.Â
What is SECR reporting?Â
The Streamlined Energy and Carbon Reporting (SECR) framework is a UK government framework that mandates qualifying companies to disclose their energy use, carbon emissions, and energy efficiency measures in their annual reports.Â
Introduced in April 2019, SECR replaced the Carbon Reduction Commitment (CRC) scheme. It aims to enhance corporate transparency on energy consumption and support the UK’s net-zero targets.
SECR applies to large UK-incorporated companies and Limited Liability Partnerships (LLPs) that meet at least two of the following criteria:
- An annual turnover of £36 million or more
- A balance sheet total of £18 million or more
- 250 or more employees
Qualifying organisations must report their Scope 1 and Scope 2 emissions, with Scope 3 reporting encouraged but not mandatory. SECR helps businesses identify energy-saving opportunities, improve efficiency, and align with sustainability best practices while ensuring compliance with regulatory standards.
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Challenges in SECR data collection and reportingÂ
Organisations required to comply with SECR often face significant challenges in gathering, verifying, and disclosing their energy and emissions data. Below are some of the key obstacles businesses encounter when ensuring compliance with SECR requirements.
Data availability and accuracy
Many companies struggle to collect complete and accurate energy consumption data, particularly if they operate across multiple locations or rely on third-party suppliers. Inconsistent metering, lack of centralised data collection, and missing historical data can all contribute to reporting errors. Without reliable data, organisations risk non-compliance and reputational damage.
Scope 3 emissions complexity
Although SECR does not mandate Scope 3 emissions reporting, companies that choose to disclose this data often face difficulties in tracking indirect emissions, such as those from supply chains, employee commuting, and business travel. Since much of this data must be sourced from external partners, ensuring consistency and transparency can be challenging.
Managing different energy sources
Organisations that use a mix of electricity, gas, and fuel need to consolidate data from various providers, often in different formats and measurement units. This complexity increases further when including transport-related emissions, such as company fleets or leased vehicles. Accurately calculating emissions from multiple energy sources requires precise data tracking and a strong understanding of conversion factors.
Keeping up with compliance requirements
SECR reporting is continuously evolving, requiring businesses to stay updated with the latest regulations and align their disclosures with other frameworks, such as the Energy Savings Opportunity Scheme (ESOS), the Taskforce on Climate-Related Financial Disclosures (TCFD), and the Corporate Sustainability Reporting Directive (CSRD). Keeping pace with changes in DEFRA’s emission factors and international sustainability standards can be overwhelming, particularly for companies without dedicated sustainability teams.
Lack of internal expertise and resources
Many businesses do not have in-house sustainability specialists or carbon accounting experts, making it difficult to interpret SECR guidelines and apply them correctly. Smaller companies, in particular, often lack the resources to implement efficient data collection processes, leading to manual errors, inefficiencies, and compliance risks.
Data verification and auditability
SECR reports must be verifiable and auditable, as they are subject to review by regulators, investors, and other stakeholders. Without strong data governance frameworks, businesses risk misreporting or being accused of greenwashing. Establishing robust verification processes ensures that reported energy and emissions figures are accurate, consistent, and defensible.
Reporting integration and standardisation
Many organisations must report under multiple sustainability frameworks, including SECR, TCFD, and ESOS, leading to duplication of effort and inconsistencies in reporting quality. The lack of a universal reporting format can make it difficult for businesses to align SECR with their broader ESG disclosures efficiently.
Communicating energy efficiency measures
SECR requires companies to disclose energy efficiency actions taken during the reporting period. However, many organisations fail to track and document their initiatives effectively, leading to vague or incomplete disclosures. Demonstrating tangible progress on energy reduction while aligning it with corporate sustainability goals is a common challenge.
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Best practices for accurate SECR data collectionÂ
Accurate data collection is essential for SECR compliance. Ensuring precision, consistency, and completeness in energy and emissions reporting not only meets regulatory requirements but also enhances transparency and helps businesses identify energy-saving opportunities. Below are the best practices for effective SECR data collection.
Establish clear data collection processes
To maintain data accuracy and consistency, organisations should clearly define roles and responsibilities for SECR compliance within sustainability, finance, or operations teams. Standardising data formats, measurement units, and reporting procedures helps prevent discrepancies and ensures alignment across departments. Developing a centralised data collection system allows businesses to aggregate energy consumption from all sources efficiently.
Use automated energy tracking systems
Manual data entry increases the risk of errors and inconsistencies. To improve accuracy, businesses should implement automated energy management software that tracks and consolidates real-time energy usage. Smart meters and IoT sensors provide precise consumption data from buildings, industrial processes, and transport, while cloud-based platforms facilitate seamless data integration across multiple locations.
Standardise emission calculation methodologies
Consistent emissions calculations are key to accurate SECR reporting. Businesses should follow government-approved methodologies such as the DEFRA (UK Government) emission factors and the GHG Protocol to ensure standardised reporting. Converting energy consumption into carbon dioxide equivalent (COâ‚‚e) using recognised emission factors improves comparability. Including intensity metrics, such as COâ‚‚e per unit of revenue or per employee, allows businesses to benchmark sustainability performance effectively.
Verify and validate data for accuracy
Regular verification ensures data reliability and compliance. Organisations should conduct internal audits and data validation checks to identify anomalies in reported figures. Cross-checking data with utility bills, fuel receipts, and transport logs can confirm accuracy. Engaging third-party verifiers enhances credibility and reassures stakeholders that the reported information is accurate and transparent.
Ensure comprehensive data coverage
SECR requires businesses to report on Scope 1, Scope 2, and relevant Scope 3 emissions, such as business travel. To avoid gaps in reporting, organisations must collect data across all sites, facilities, and transport operations within the reporting boundary. Accounting for all fuel types, renewable energy sources, and transport emissions ensures completeness. Maintaining historical energy data helps track progress and identify energy efficiency trends over time.
Integrate SECR with other sustainability reporting
SECR reporting can be aligned with other regulatory frameworks such as ESOS, TCFD, and CSRD to streamline sustainability disclosures. Businesses can improve efficiency by using consistent methodologies and data sources across reporting frameworks. Automating data transfer between SECR reports and ESG disclosures reduces duplication and enhances reporting accuracy. Aligning energy reporting with broader net-zero and decarbonisation strategies strengthens corporate sustainability commitments.
Communicate energy efficiency actions effectively
SECR requires businesses to disclose their energy efficiency improvements. To meet this requirement, organisations should track and document all energy-saving initiatives, such as lighting upgrades, process optimisation, and equipment replacements. Quantifying the impact of measures in terms of energy savings and COâ‚‚e reduction demonstrates progress. Setting clear targets and key performance indicators (KPIs) enables continuous improvement in energy management.
Keep detailed records for future audits
To maintain compliance and facilitate audits, businesses should store SECR reports, supporting documentation, and calculation methodologies for at least two compliance cycles. Keeping a detailed data audit trail, including timestamps, sources, and responsible individuals, ensures transparency and accountability. Regularly reviewing and updating data collection policies in line with regulatory changes helps businesses remain compliant.
Final thoughts
By establishing robust data collection processes, standardising emissions calculations, and aligning SECR with other sustainability frameworks, organisations can reduce costs, strengthen credibility, and future-proof their operations. Effective SECR compliance mitigates risks but also positions businesses as leaders in responsible energy management.
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