How to get savvy about SECR

The countdown is now on for the first reporting deadline for the mandatory Streamlined Energy and Carbon Reporting (SECR) scheme, and some businesses will already be 6 months into their first SECR reporting period..  However, like the CRC before it, are energy managers struggling to get buy in from the top of their businesses on its importance?  Emma Hird, Client Optimisation Manager at Inspired Energy, provides advice on how energy managers can encourage their businesses to go ‘beyond compliance’, when it comes to SECR, so it is seen as an opportunity, rather than a burden.

Against a backdrop of Net Zero and increasing climate activism, reducing carbon emissions and energy efficiency should now firmly be on the boardroom agenda. SECR, which is designed to replace the reporting elements of the Carbon Reduction Commitment Scheme (CRC) and make energy reporting a simpler process, also allows shareholders and investors to hold companies to account if they are not doing enough to reduce emissions.

However, although mandatory, we are hearing from some of our energy manager clients that they are struggling to get buy-in from the top when it comes to SECR compliance.

What we have seen with previous schemes is that they can be often be seen as an additional administrative burden when time and cost pressures on a business are already high. This is particularly true today, in the current uncertain economic and political climate. And, while the SECR box will be ticked, there isn’t much appetite – or available resource – to do much more than that.

Now, for a significant proportion of qualifying businesses, managing energy consumption is not a new phenomenon – many will already be part of the Energy Savings Opportunity Scheme (ESOS), and many have announced, or are developing, innovative and ambitious plans on how they will contribute to the UK’s net zero goal. However, there are a considerable number of businesses that will be new to environmental reporting, and those responsible internally for managing the SECR reporting process will be facing pressures to ensure the right time and resource is dedicated to compliance.

So, what is the case for going beyond ‘just’ complying? It really is a change in mindset – i.e. rather than seeing it as something that ‘has’ to be done, savvy organisations are seeing it as an opportunity to take control of their energy consumption and promote their sustainability credentials. At a time when businesses are under increasing pressure to demonstrate they are doing all they can to reduce their impact on the environment, this is a compelling reason to treat SECR seriously.

Therefore, arguably, those organisations that take a proactive and progressive approach to SECR will be the ones that see the biggest benefits. CSR is a bedrock for many businesses, and their SECR report is a real opportunity to shout about sustainability – but only if action is taken to improve energy efficiency throughout the year.

For example, although businesses are required to include any energy efficiency projects that they have carried out within the reporting year, they aren’t actually required to implement any energy efficiency measures at all. However, if an organisation doesn’t implement any efficiency projects, this will need to be stated in the report.

At a time when customers are increasingly expecting businesses to be demonstrating a serious commitment to sustainability, what would be best – publishing a report that is full of proactive efficiency projects, or one that shows no real action to improve sustainability at all? As the SECR report is in the public domain, failing to implement any energy efficiency measures could result in both financial and reputational damage.

However, reputational impact isn’t the only benefit of adopting efficiency projects – improving energy efficiency is the only guaranteed way to ensure that a business isn’t paying more than they should for their energy. In fact, increasing energy efficiency through implementing physical and behavioural projects can result in an organisation ultimately making savings on its energy spend. In today’s volatile energy market, many businesses are seeing significant increases in their energy bills, so it’s financially prudent to ensure energy isn’t being wasted.

We are now on countdown to the first round of SECR reporting. It will be interesting to see which organisations will have seen SECR as an opportunity to affect real change in how they approach the management of their energy consumption. What is clear is that, as we transition into a low-carbon world, businesses will play a crucial role in the UK’s net zero future – and schemes like SECR should be seen as a means to achieve this, rather than another box to tick.