SECR compliance
SECR compliance: the checklist, the costs, the failures
SECR compliance means a correct energy and carbon disclosure, approved with the directors’ report and filed with the accounts, every year — under Schedule 7 to SI 2008/410 and its LLP equivalent.
This page gives the checklist, what compliance costs on the government’s own figures, where companies most often fall short, and what to ask anyone offering SECR compliance support.
Who must comply
Three routes into scope, one of them size-free
SI 2018/1155 applies SECR to quoted companies, large unquoted companies and large LLPs.
A large unquoted company is one that is not exempt under the paragraph 20B size test, which in practice means exceeding at least two of £36 million turnover, £18 million balance sheet total and 250 employees.
LLPs are caught on the same figures by regulation 12B of the LLP accounts regulations, not by paragraph 20B.
SECR’s figures are written into its own tables and do not follow section 465 of the Companies Act 2006, whose medium-sized limits rose to £54 million turnover and £27 million balance sheet from 6 April 2025.
So a company can file medium-sized accounts and still be in SECR scope, which makes it easy to assume SECR has stopped applying when it has not.
The tests in full are on SECR thresholds and SECR eligibility.
| Population | Test | Provision |
|---|---|---|
| Quoted company | None — any size | Sch 7 Part 7 |
| Large unquoted company | Exceeds 2 of £36m turnover, £18m balance sheet, 250 employees | Sch 7 ¶20B, ¶20C |
| Large LLP | The same figures | SI 2008/1911 reg 12B |
SECR compliance checklist
Eleven checks before the report is approved
Built from Schedule 7 Parts 7 and 7A. Where the two Parts differ, the check names both.
| # | Check | Provision |
|---|---|---|
| 1 | Scope confirmed for this financial year, including the group test for a parent | ¶20B, ¶20C; s.385 for quoted status |
| 2 | Emissions from the right sources: fuel and facilities (quoted) or gas and transport fuel (unquoted, LLP) | ¶15(2); ¶20D(1) |
| 3 | Emissions from purchased energy: electricity, heat, steam, cooling (quoted) or electricity (unquoted, LLP) | ¶15(3); ¶20D(2) |
| 4 | Energy use stated in kWh | ¶15(3A); ¶20D(3) |
| 5 | Quoted only: the UK and offshore proportion of emissions and energy | ¶15(3B)–(3C) |
| 6 | Principal energy efficiency measures taken in the year described | ¶15(3D); ¶20D(4) |
| 7 | Methodology stated, including the conversion factor year | ¶16; ¶20F |
| 8 | At least one intensity ratio | ¶17; ¶20G |
| 9 | Previous year's figures shown (not in the first year) | ¶18 and ¶18A; ¶20H |
| 10 | Any omission explained by the relief it relies on | ¶15(4)–(5); ¶20D(6)–(7) |
| 11 | Reporting period stated if it differs from the financial year | ¶19–19A; ¶20I–20J |
The disclosure requirements behind each check are explained on SECR requirements, and the finished section is illustrated on SECR reporting.
Most reports state that they follow the GHG Protocol Corporate Standard with the UK Government conversion factors; the regulations require the methodology to be stated, not a particular one.
The compliance cycle
One year, in eight steps
SECR is an annual duty, so compliance is a cycle that repeats with the accounts.
The step most often left too late is the first: a company that has grown, or that merged, can move into scope in a year it did not plan for.
The second is the data, because a year of energy records cannot be rebuilt after the year end without estimates, and estimates must be described in the methodology.
The government guidance is the most detailed practical material available, though parts of it diverge from the regulations, as SECR guidance sets out.
The directors approve the disclosure as part of the directors’ report, and it is filed with the accounts; the dates are on SECR deadlines.
- 01Confirm scope
Quoted status, or the size test on this year's figures.
- 02Set the boundary
Which entities, which sites, UK-only or worldwide.
- 03Collect the data
Bills, meter reads, fuel cards, mileage claims.
- 04Calculate
Conversion factors for the activity year.
- 05Write it up
Ratio, methodology, measures, comparatives.
- 06Review
Finance and whoever owns energy data.
- 07Approve
With the directors' report — s.419.
- 08File
With the accounts, within the s.442 period.
What compliance costs
The government’s own cost figures
DESNZ’s independent evaluation of SECR, published on 29 January 2026, is the only published measure of what SECR compliance costs.
It put the mean ongoing cost to a complying business at £7,100 a year, against the £2,300 the 2018 impact assessment predicted.
The 2026 post-implementation review puts the aggregate at £270 million in the first year and £140 million a year after that, against £42 million and roughly £26–31 million predicted — the review gives both of those ongoing figures on different pages.
It attributes the gap to far more companies being in scope than forecast (19,900 against 11,300) and to higher costs per business, including outsourcing to consultancies and auditors.
Against that, the evaluation estimated monetised benefits of £8.1 billion from 2019 to 2025 against £3.0 billion of costs, a benefit–cost ratio of 2.72.
These are the government’s averages; this site does not quote prices for SECR services, and a figure for any one company depends on its estate and its data.
Where companies fall short
Compliance is patchier than it looks
Suspected non-compliance
The evaluation's conclusion, triangulated across a machine read of accounts (34%, an overestimate), a business survey and the FRC's 2024 reviews (10%, an underestimate). Gaps are concentrated among private companies and LLPs.
The FRC's thematic review
Of 27 mainly larger entities, the FRC found largely compliant minimum disclosure, with weaknesses in methodology, in whether ratios could be reconciled, and in explaining assurance.
Comparability
The PIR found comparison between companies hampered by heterogeneous intensity metrics and inconsistent placement and formatting.
Changed behaviour
Only 25% of in-scope compliers said SECR led to a reduction in energy use, though 79% published data they otherwise would not have.
In our reading of the regulations, the avoidable errors are simple ones: using a relief without the statement it requires, leaving out the transport-fuel limb, using the wrong year’s factors, and changing the boundary or the ratio without saying so.
Each is avoidable by checking the report against the paragraphs rather than against last year’s report.
SECR compliance support
What to ask anyone offering help
On DESNZ’s figures, 56% of complying businesses pay external costs, which the review attributes partly to outsourcing to consultancies and auditors and to buying monitoring technology.
Because the regulations name no qualified role, a provider’s understanding of Schedule 7 is the thing to test.
- Which Part of Schedule 7 applies to us, and why — and have you checked the group test?
- Which conversion factor year will you use, and why that one?
- Does our energy figure include only what paragraph 20D(3) requires, or more, and will the report say so?
- If we rely on a relief, what exactly will the report state?
- If you offer verification, is it voluntary, and against which standard?
A provider who describes assurance as mandatory, quotes a SECR threshold of £54 million, or says an AIM company is in scope at any size has misread the regulations.
To talk through a company’s position independently, you can book a free 15-minute call.
SECR has no equivalent of the ESOS lead assessor.
The directors approve the disclosure and carry the responsibility for it, whoever prepares it.
If it goes wrong
No SECR fine — but real exposure
SECR creates no penalty of its own.
A director who approves a directors’ report knowing it does not comply, or reckless as to whether it complies, and fails to take reasonable steps, commits an offence under section 419(3)–(4) of the Companies Act 2006.
Filing the accounts late is a separate matter: section 453 and SI 2008/497 set a civil penalty on the company of £150 to £1,500 for a private company and £750 to £7,500 for a public one, doubled for a second consecutive late year.
That penalty is for lateness, whatever the SECR content says.
Who can compel a revision, and the FRC’s record of never having needed a court order, are on SECR enforcement and penalties.
Other regimes
SECR is not the only climate duty
Climate-related financial disclosures under sections 414CA and 414CB of the Companies Act 2006 are a different regime, reported in the strategic report by certain companies with more than 500 employees — among them traded companies, banks, insurers and companies with turnover above £500 million.
A company can be subject to both, and meeting one does not meet the other.
Listed companies now face a third layer: the FCA’s PS26/19, published on 30 September 2026, requires them to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027.
It finalises CP26/5, which had proposed making UK SRS S2 mandatory; the final rules do not.
UK SRS S1 and S2 were published by the Department for Business and Trade on 25 February 2026 for voluntary use by any entity, and the UK SRS standards have their own reference.
SECR was designed in a 2017–18 consultation to sit alongside those regimes, and it continues to; how it relates to UK SRS is on SECR vs UK SRS.
Frequently asked
SECR compliance — frequently asked
What does SECR compliance involve?
Establishing whether the company or LLP is in scope, collecting a year of energy data for the sources Schedule 7 names, converting it to emissions, choosing an intensity ratio, writing the methodology and efficiency sections, showing last year's figures, and having the disclosure approved with the directors' report and filed with the accounts on time.
Who needs to comply with SECR?
Every quoted company, whatever its size; large unquoted companies that exceed at least two of £36 million turnover, £18 million balance sheet total and 250 employees; and large LLPs on the same figures under SI 2008/1911 regulation 12B. DESNZ's 2026 evaluation measured 19,900 organisations in scope.
How much does SECR compliance cost?
On DESNZ's own figures, the mean ongoing cost to a complying business is £7,100 a year, including about 94 hours of internal staff time worth around £2,500, with 56% of compliers also paying for external help. Across the economy the evaluation put ongoing costs at £140 million a year. This site does not quote prices for any service.
What happens if a company does not comply with SECR?
There is no SECR-specific fine. A director who approves a directors' report knowing it does not comply, or reckless as to whether it does, commits an offence under Companies Act 2006 section 419(3)–(4). Filing the accounts late attracts the general late-filing penalty under section 453, from £150 to £7,500 depending on company type and delay. The FRC can seek a court-ordered revision, though it has never needed to.
How many companies fail to comply with SECR?
DESNZ's independent evaluation concluded that actual non-compliance is likely to be 14–23% of the in-scope population, triangulating a machine read of accounts (34%, an overestimate), a business survey (14–23%) and the FRC's 2024 reviews (10%, an underestimate). It found the gaps concentrated among private companies and LLPs.
Do we need a consultant for SECR compliance?
No law requires one. Unlike ESOS, SECR names no qualified role: the directors approve the disclosure and are responsible for it. Many companies do use outside help — DESNZ found 56% of compliers incur external costs — and the questions on this page are a way to judge whether a provider understands the regulations.
Does SECR need third-party verification?
No. No paragraph of Schedule 7 Part 7 or Part 7A mentions assurance, verification or audit, and the government guidance marks third-party verification as optional. A company can commission it voluntarily.
Is SECR compliance the same as climate-related financial disclosure?
No. Climate-related financial disclosures under Companies Act 2006 sections 414CA and 414CB are a separate regime, sitting in the strategic report and applying to certain companies with more than 500 employees, such as traded companies, banks, insurers and companies with turnover above £500 million. SECR is energy and carbon information in the directors' report. A company can be subject to both.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- legislation.gov.ukSI 2018/1155 — the SECR regulations
The instrument that created SECR; in force 1 April 2019.
- legislation.gov.ukSI 2008/410, Schedule 7 — the disclosure duties
Parts 7 and 7A: the checklist on this page is built from them.
- legislation.gov.ukSI 2008/410, Schedule 7 paragraph 20B — the size test
Self-contained £36m / £18m / 250, two or more.
- legislation.gov.ukSI 2008/1911 — the LLP accounts regulations
Regulation 12B, inserted by SI 2018/1155, applies SECR to large LLPs.
- legislation.gov.ukCompanies Act 2006, section 465 — companies qualifying as medium-sized
The accounts test uplifted from 6 April 2025, which SECR does not follow.
- legislation.gov.ukCompanies Act 2006, section 419 — approval of the directors' report
s.419(3)–(4): the offence of approving a non-compliant report.
- legislation.gov.ukCompanies Act 2006, section 453 — civil penalty for late filing
A penalty on the company for lateness, not for SECR content.
- legislation.gov.ukSI 2008/497, regulation 4 — late filing penalty amounts
£150 to £1,500 (private) and £750 to £7,500 (public), doubled for repeat lateness.
- legislation.gov.ukCompanies Act 2006, section 414CA — non-financial and sustainability information statement
The separate climate-related financial disclosure regime.
- GOV.UKEnvironmental reporting guidelines, including SECR requirements
The government guidance, last updated 29 March 2019.
- GOV.UKStreamlined energy and carbon reporting — consultation (BEIS, 2017–18)
The consultation that designed SECR.
- Department for Energy Security and Net ZeroIndependent evaluation of SECR (29 January 2026)
Population, compliance rates, costs and benefits.
- Department for Energy Security and Net Zero2026 SECR Post-Implementation Review (PDF)
pp12 and 26: aggregate costs; the recommendation to retain with amendments.
- GHG ProtocolCorporate Accounting and Reporting Standard
The methodology most SECR reports state.
- Financial Conduct AuthorityPS26/19 — UK SRS for listed companies, comply or explain
Published 30 September 2026.
- Financial Conduct AuthorityCP26/5 — the consultation PS26/19 finalises
Published 30 January 2026.
- Department for Business and TradeUK SRS S1 and UK SRS S2 (25 February 2026)
Published for voluntary use.