SECR Compliance Guide 2026

Who Must Comply with SECR?

SECR applies to three categories of organisation, as defined by the SECR regulations:

Quoted Companies

All UK-incorporated quoted companies must comply with SECR, regardless of size. A quoted company means a company whose equity share capital is officially listed on the London Stock Exchange, EEA-regulated markets, or specified overseas markets including NYSE and NASDAQ.

Large Unquoted Companies

Large unquoted companies must comply if they meet at least two of the three size tests in the financial year:

• Turnover: £36 million or more
• Balance sheet total: £18 million or more
• Employees: 250 or more (calculated as average over the year)

Large LLPs

Limited Liability Partnerships (LLPs) are subject to the same size tests as unquoted companies.

What Must Be Disclosed?

SECR requires disclosure of six core elements within the directors' report, as specified by Companies Act 2006 section 414CA:

1. UK Energy Consumption

Total UK energy consumption in kilowatt hours (kWh), covering electricity, gas, transport fuels, and other energy sources used in UK operations.

2. Scope 1 GHG Emissions

Direct greenhouse gas emissions in tonnes CO₂ equivalent (tCO₂e) from sources owned or controlled by the company, including combustion in owned or controlled boilers, vehicles, and industrial processes.

3. Scope 2 GHG Emissions

Indirect emissions in tCO₂e from purchased electricity, steam, heating, and cooling consumed by the company.

4. Intensity Ratio

An intensity ratio expressing annual emissions as a ratio against revenue, production, or another appropriate business metric to enable performance comparison.

5. Methodology

Description of the methodology used for energy and emissions calculations. Most companies use the GHG Protocol Corporate Standard with UK Government (DEFRA/DBT) conversion factors.

6. Energy Efficiency Actions

Narrative description of energy efficiency actions undertaken during the financial year, or a statement that no such action was taken.

7. Prior Year Comparatives

Previous year data for all quantitative metrics to enable trend analysis.

SECR Implementation Process

The typical timeline for first-time SECR compliance is 6-9 months, depending on organisation size and complexity:

Phase 1: Scope Assessment (Month 1)

1. Determine SECR applicability using the size tests
2. Identify reporting boundary — which legal entities are included
3. Understand filing deadlines based on accounting reference date
4. Assess current data availability for energy and emissions

Phase 2: Data Collection Setup (Months 2-4)

1. Energy data collection — electricity, gas, transport fuels
2. Emissions calculation — Scope 1 and 2 sources
3. Methodology selection — typically GHG Protocol with DEFRA factors
4. Intensity ratio design — choose meaningful business metric

Phase 3: Report Preparation (Months 5-7)

1. Calculate emissions using chosen methodology
2. Prepare narrative sections — energy efficiency actions
3. Draft SECR section for directors' report
4. Internal review and approval process

Phase 4: Filing & Compliance (Months 8-9)

1. Integrate with annual accounts filing
2. Submit to Companies House before deadline
3. Consider external assurance if required
4. Plan for next year — ongoing data collection

SECR and UK SRS Interaction

The relationship between SECR and the newly published UK Sustainability Reporting Standards (UK SRS) affects compliance planning:

For Quoted Companies

• 2026: Continue SECR compliance as normal
• 2027 onwards: May become subject to UK SRS S2 if listed (subject to FCA Policy Statement)
• Planning: Consider UK SRS readiness alongside SECR

For Large Unquoted Companies/LLPs

• 2026 and beyond: SECR remains the primary mandatory framework
• Voluntary: UK SRS available for voluntary adoption
• Supply chain: Monitor customer ESG requirements

Common Implementation Challenges

Data Collection Issues

• Multi-site operations — coordinating data across locations
• Utility billing cycles — aligning with financial year-end
• Third-party sites — determining operational control
• Historical data — obtaining prior year comparatives

Methodology Decisions

• Scope boundaries — which activities to include
• Emission factors — which conversion factors to use
• Intensity ratios — selecting meaningful business metrics
• Energy vs emissions — understanding the relationship

Reporting Integration

• Directors' report — fitting within existing structure
• Assurance requirements — determining verification needs
• UK SRS preparation — building towards future requirements
• Internal systems — establishing ongoing processes

SECR Penalties and Enforcement

SECR does not carry separate penalties — enforcement follows standard Companies House rules:

• Late filing penalties: £150 to £7,500 depending on company type and delay period under Companies Act 2006 section 453
• Incorrect disclosure: No specific SECR penalties, but directors' duties apply
• Non-disclosure: Potential regulatory action under company law provisions

Next Steps for SECR Compliance

1. Assessment: Use our scope decision tree to confirm SECR applies
2. Timeline: Plan implementation using our benchmark timeline
3. Data: Begin energy consumption data collection immediately
4. Methodology: Select calculation approach (typically GHG Protocol + DEFRA)
5. Integration: Plan SECR section within directors' report structure
6. Future-proofing: Consider UK SRS readiness for quoted companies

The key to successful SECR compliance is early planning and systematic data collection. Most implementation challenges arise from delayed starts and inadequate data systems.