Do Companies Have To Report Carbon Emissions?
Climate change is a growing concern, and a common question is “should companies report carbon emissions?”
Below, we detail who needs to report on emissions, and what to do if you want to report voluntarily.
Net Zero Carbon Target
The UK Government has set a target to be carbon net-zero by 2050.
To aid this journey to net-zero, the government has introduced a reporting mechanism called the Streamlined Energy and Carbon Reporting Framework – better known as SECR. This, along with the Companies Act 2006, states that all qualifying businesses must report their greenhouse gas emissions each year.
SECR Explained
Quoted companies and large incorporated unquoted companies that meet at least two of the following criteria, must report their greenhouse gas emissions each year through SECR:
- Gross income of £36 million or more
- A balance sheet of £18 million or more
- Over 250 employees
You can also use our flow diagram here to identify if you need to report under the SECR framework.
Public sector organisations are exempt from SECR, and private companies that use less than 40,000kWh per year do not need to comply.
Companies that are obligated to comply must do so for financial years starting on or after the 1st April 2019. Information on carbon emissions must be included in their Directors’ Report, or equivalent Energy and Carbon Report for LLPs.
Why Only Large Companies?
Large companies play a critical role in climate change – research shows that 100 large companies are responsible for 71% of industrial greenhouse gas emissions since 19881 – so it is understandable that the Government is starting with them.
Non-Obligation Reporting
Although small businesses do not need to comply with SECR, and are not required legally to publish carbon emissions, they may still choose to do so voluntarily. Small businesses can publicly disclose emissions on their company website, in a corporate responsibility report or carbon reduction plan.
Benefits of Reporting
Whether complying with SECR or reporting voluntarily, reporting on a company’s carbon emissions can have many benefits. Firstly, and most importantly, the process will allow them to identify the impact the company has on the environment, helping to analyse the steps needed to reduce their carbon footprint. Additionally, reporting can help to identify areas where costs can be reduced, or how the supply chain can be made more sustainable.
Companies positioning themselves as ‘caring about their impact on the environment’ can open market opportunities to win customers and boost their reputation with stakeholders.
SECR Support
To tackle climate change, we must all come together. Companies can become more climate focused by ensuring every action and decision in their business is made with regards to the impact on environment.
Our SECR service ensures you get the expert help you need to reduce your energy and comply with the legislation. Contact us now for more information and specialist support.
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