Recently, we’ve seen more businesses either voluntarily submitting energy reports, or going beyond the requirements of the schemes they’re required to participate in. This means collating, analysing and reporting on more data than they need to – so why are businesses choosing to report on more than they have to?
Our compliance team helps businesses across all sectors and of all sizes to report under schemes like the Energy Savings Opportunity Scheme (ESOS) and the Streamlined Energy and Carbon Reporting (SECR) scheme. Until the past few years, businesses largely saw these schemes as nothing more than a tick-box exercise, and many struggled with the additional burden that energy reporting placed on their in-house teams. But lately, our compliance experts have noticed a shift in customer sentiment around schemes like SECR.
A growing number of businesses are choosing to voluntarily report on their emissions – including Inspired Energy, as we submitted a voluntary SECR report the year before we were required to do so. We’re also seeing more clients including their Scope 3 emissions in their SECR reports, even though reporting on this area is simply ‘strongly encouraged’ (but not mandatory) for qualifying companies.
What is the driving factor behind organisations going beyond what’s required of them when it comes to SECR? Many of them are motivated by the opportunity SECR gives them to…
Demonstrate their commitment to sustainability
The majority of businesses that are choosing to voluntarily report under SECR are those that are very focused on sustainability already and are looking for a tangible way to prove that they’re dedicated to reducing their carbon emissions. As SECR requires businesses to publish the energy efficiency actions they have taken that year, it’s an excellent way for organisations that are taking a proactive approach to sustainability to shout about the progress they’re making – and demonstrate what’s planned for them in the future too. By publishing their carbon reduction initiatives in their Directors’ Report, businesses can highlight their commitment to sustainability to their stakeholders.
Encourage the C-suite to take action
Within some businesses, it can be difficult for energy managers to gain the support they need from their senior team in order to implement energy efficiency actions. For these energy professionals, voluntarily participating in SECR is an opportunity to motivate the C-suite to take action to improve their organisation’s sustainability. If the senior team know that any actions they take must be published in their Directors’ Report – and understand the reputational risk created by not having any energy efficiency actions to include – then they will be much more likely to back the solutions their energy team suggests.
Prepare for the future
SECR currently applies to around 11,900 UK businesses, but as we move towards the UK’s net zero emissions by 2050 target, it’s likely that organisations’ energy reporting obligations will increase. For many businesses, their Scope 3 emissions – the indirect emissions that are created by their value chain – represent the majority of their greenhouse gas emissions, so we may see SECR requirements change to make Scope 3 reporting mandatory in the future. It’s also likely that the eligibility criteria for schemes like SECR and ESOS will expand over the coming years, meaning that more businesses will be obligated to comply with these schemes. Many organisations are voluntarily reporting now, or voluntarily reporting on Scope 3, to ensure they’re prepared for when they’re required to report in the future.
Streamline their compliance processes
Perhaps surprisingly, many organisations that are required to report under ESOS but not SECR are choosing to voluntarily comply with SECR, too. Why are they choosing to take on an additional reporting scheme? As these organisations are already reporting every four years under ESOS, collating an annual SECR report can actually help them to spread the administrative burden involved in collating the data required by both schemes and streamline their compliance processes. SECR’s requirement to publish energy efficiency actions can also help them to act on their ESOS energy efficiency recommendations, rather than simply filing away their ESOS report.
Ready to go beyond your reporting requirements?
If you’d like to join the growing number of businesses voluntarily reporting under SECR, or going beyond their SECR requirements, our compliance specialists are here to help you. They can guide you through the entire SECR process or do it all for you – so you can access the benefits of voluntary compliance without burdening your in-house team. To find out more, visit our SECR page.