In recent years, we’ve seen a renewed focus on sustainability. The introduction of net zero targets by the UK Government, combined with the so-called “Greta effect” means that people are sitting up and taking notice when it comes to climate change. What’s more, it is now widely understood that businesses must significantly reduce the environmental impact of their activities if we’re going to come anywhere close to reaching our carbon targets by 2050.
Over the last decade, the energy industry has encountered a number of compliance schemes, many of which have been complex, and costly to maintain. However, with the launch of Streamlined Energy and Carbon Reporting (SECR) last year, the Government aims to rejuvenate the energy compliance landscape, with a scheme that can deliver real value to the end user. Finally, a compliance scheme which will provide a clear pathway for businesses who are ready to plan their own journey towards net zero.
Sustainability: a board-level concern
SECR requires qualifying organisations to report on their energy consumption (including transport energy use) and associated carbon emissions, as well as provide details of at least one intensity metric. They are also required to give a narrative on any energy efficiency actions taken over the course of the reporting period.
Your SECR report forms part of your annual submission to Companies House, meaning that anyone can see how your business is performing when it comes to sustainability, including investors, employees, clients and even competitors. Stakeholders will be able to see how your organisation fares in terms of energy reduction and will have clear visibility of what efficiency measures you have in place. If you haven’t implemented any efficiency measures, this must be stated. This means that if sustainability isn’t already a board-level concern, it soon will be.
Avoiding negative reputational impact isn’t the only benefit of adopting efficiency projects. Improving energy efficiency is a guaranteed way of ensuring your business isn’t paying more than it should for its energy. Mounting energy costs are a concern for many businesses, especially in the current economic climate. And in today’s volatile energy market, many businesses have seen their bills increase significantly, so it is financially prudent to avoid waste wherever possible. Schemes like SECR should be in the forefront of your CFO’s mind for this reason alone.
Sustainability and share price
Believe it or not, your track record on sustainability could also impact your business’ share value – we’re finding that there is an ever-increasing pressure from investors and shareholders for businesses to be run sustainably. Investors want to know where their money is being spent and what it is being used for – with research showing that more than half of UK investors have increased their sustainable investments over the last five years.
Your SECR report can be much more than a box-ticking exercise – it is an opportunity to shout about the great work you’re doing, a way for you to track your progress towards net zero, and a tool for stakeholders to see if you are the kind of business they want to invest in and work with. Make sure you get it right- it pays to go beyond compliance.
For help with your SECR obligations, get in touch at firstname.lastname@example.org
You can learn more about SECR by watching our webinar – The role of carbon in the C-suite from our Inspired On-Demand series.