What is a SECR intensity ratio?
An intensity ratio expresses a company's emissions in relation to a quantifiable factor tied to its own activities, rather than as a raw tonnage figure on its own.
The statute is deliberately open about the denominator. For quoted companies, Schedule 7 paragraph 17 requires “at least one ratio which expresses the company's annual emissions in relation to a quantifiable factor associated with the company's activities”.
For unquoted companies and LLPs the wording is the same, in paragraph 20G.
Neither paragraph names a required metric — turnover, employee headcount, production volume and floor area are all in use across UK SECR reports, and none of them is mandated over another.
Why Schedule 7 requires one at all
A tonnage figure on its own does not say whether a company is getting more or less carbon-efficient — a growing company's absolute emissions can rise even as its efficiency improves, and a shrinking company's emissions can fall for reasons that have nothing to do with better practice.
An intensity ratio normalises the tonnage against something that moves with the business, so a reader can compare year on year regardless of growth or contraction.
Choosing the right ratio for your business
Because the statute leaves the denominator open, the choice comes down to which quantifiable factor best tracks the size of your operation.
The four denominators seen most often in UK SECR reports are revenue or turnover, average full-time-equivalent employees, units of production, and floor area.
Each fits a different kind of business better than the others, and the same denominator can mislead if applied to the wrong business model.
Worked example: manufacturing, per unit of production
A manufacturer whose output varies in volume but not much in unit type is better served by a production-based ratio than a revenue-based one, because unit price movements would otherwise distort the trend.
Illustrative figures, not a real company: a manufacturer producing 500,000 units in the year, with combined Scope 1 and Scope 2 emissions of 4,000 tCO₂e, would report an intensity ratio of 0.008 tCO₂e per unit produced.
Worked example: professional services, per employee
A professional services firm with little physical production and no meaningful floor-area variation is usually better served by an employee-based ratio, since headcount tracks the scale of the business more closely than revenue, which can swing with fee rates alone.
Illustrative figures, not a real company: a firm with 300 average full-time-equivalent employees and 1,200 tCO₂e of emissions would report an intensity ratio of 4 tCO₂e per employee.
Worked example: retail, per square metre of floor area
A retailer operating a network of stores is often better served by a floor-area ratio, because heating, lighting and refrigeration load scale with the size of the estate rather than with headcount or unit sales.
Illustrative figures, not a real company: a retailer operating 50,000 square metres of retail floor space and reporting 6,000 tCO₂e of emissions would state an intensity ratio of 0.12 tCO₂e per square metre.
Illustrative figures, not a real company: a fourth common option, revenue-based reporting, suits businesses where turnover moves in step with operational scale — for example a company with 8,000 tCO₂e of emissions and £40 million of turnover would report 200 tCO₂e per £million of turnover.
Consistency matters more than the metric
Where the ratio goes in the directors' report
The intensity ratio sits inside the same disclosure as the rest of the SECR figures — the directors' report for companies, and the equivalent energy and carbon report for LLPs.
It is not a standalone filing or a separate section elsewhere in the annual report; it belongs alongside the energy consumption, emissions and methodology figures required by the same part of Schedule 7.
From the second year of reporting, the prior year's ratio must be shown alongside the current year's, under Schedule 7 paragraph 20H for unquoted companies and LLPs, so the comparison is visible on the face of the report rather than left to the reader to look up.