What is SECR? Do I have to report?
Streamlined Energy & Carbon Reporting (SECR) is a new UK legislation introduced in April 2019, replacing the Carbon Reduction Commitment (CRC) scheme. The scheme requires qualifying businesses to report on their annual carbon footprint and energy use.
This legislation applies to any quoted UK-based company OR any ‘large’ unquoted companies or limited liability partnership (LLP), which fulfil any of the following three criteria: have 250+ employees, £36m+ in annual turnover, or an £18+ annual balance sheet.
Over 11,900 UK organisations need to comply with SECR regulations, many of which are ‘large’ unquoted companies or LLPs that haven’t previously reported on energy or carbon.
Where do I start?
Before using the tool, it is important to be aware that you will need to gather the aggregated company energy and fuel use data (or just for the UK if you operate in a large unquoted company or large LLP). This will include energy used onsite, such as natural gas for heating of buildings, diesel or gasoline for running of machinery, electricity use, and potentially any available data on the use of company vehicles. While the tool is designed to be as simple as possible, the SECR requirements are quite stringent and require some primary data. Therefore, if you do not have this to hand it may be useful to identify the individual(s) in your organisation who may have this.
Firstly, check if you already respond to ESOS, as this requires some similar data; whomever is responsible for the ESOS response may already have collected energy data that can be put through Reportwise and converted into carbon emissions. If you do not report to ESOS, then generally much of this data can be sourced from either accounts departments (invoicing of electricity and fuel use), operations managers (who may have usage data) or facilities teams. Lastly, if you are occupying a rental space, ask your landlord as they should be able to provide energy use data.
Where do I find data?
See ‘where do I start?’ above.
What does the Reportwise tool help me with?
Reportwise calculates the scope 1 and 2 GHG emissions (emissions associated with the electricity use and energy used directly by your company) as required for the UK Government Streamlined Energy and Carbon Reporting (SECR) requirements, or for use in other regulations or voluntary reporting. The output is a summary of the key data you need to add to your Directors Report (or equivalent), a summary of actions you have taken to improve energy efficiency within your operations, recommendations on how to further improve your performance and a detailed methodology. This meets all of the elements of SECR, or simply provides the starting point for your voluntary carbon emissions reporting as you prefer.
What other regulations can I use Reportwise for?
The Reportwise tool calculates scope 1 and 2 emissions in line with the GHG Protocol. It can be used to help provide information for ESOS and outside of the UK, other government schemes for direct energy and GHG reporting such as the US EPA Greenhouse Gas Reporting Program (GHGRP), though companies should refer to the specific requirements of these regulations to ensure all wider criteria are adhered to.
What are scope 1, 2, and 3 emissions? How do I measure them them?
The widely recognised GHG Protocol classifies a company’s carbon footprint into three ‘scopes’. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased electricity and heat. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. SECR requires reporting of scope 1 and 2 GHG emissions, but best practice is to include all scopes as many companies have much larger GHG emissions associated with their supply chains or onward use of the goods they produce.
Do I have to complete every section?
All sections of the tool need to be completed, with every question answered per section. That being said, there may be many questions and even sections that are not relevant to you. For example, if you’re a consulting firm, it’s very likely that you don’t produce any fugitive emissions or process emissions. For these, simply answer ‘No’ to questions and continue to the next section.
Do I have to complete every field in questions?
No, only fields with stars above them require answers.
The finalised button is greyed out, how do I complete my report?
You can only finalise the report once each section of the report is completed, indicated by green ticks in the left hand bar. If one of the sections shows a different icon, revisit that section and ensure all questions are answered (this includes selecting ‘no’ for questions that are not relevant to your company).
Why does the tool not include scope 3 emissions?
Scope 3 emissions cover a wide range of indirect activities including accounting for products and services you buy, use of any products you make and upstream and downstream transportation. Emitwise recommends that scope 3 emissions are calculated for best practice and would be happy to assist with this using our machine learning automated accounting tool Emitwise Pro.
I have many sites in my company and I want to calculate emissions for each. How do I do this?
Reportwise offers calculation of single input data. This can either be a total company aggregated data set (aggregated in advance of input into Reportwise) or individual site data, though only one set can be entered for a single report. For centralized calculation of multiple sites, consider Emitwise Pro which can automate the data collection process across multiple sites.
Why does Reportwise use a control approach for carbon accounting
Before you can calculate your carbon footprint, you need to identify the operations or assets that you are accountable for by understanding the organizational boundaries. This may differ depending on the sector of activity in which you operate. A company can choose one of two overarching approaches – control approach (either financial or operational) or equity share. Reportwise uses the control approach assuming allocating the reporting company 100% of emissions of the operations over which it has control. Control can be either financial ( where the company has the ability to direct the financial and operating policies of the operations with a view to gaining economic benefits from its activities) or operational (where the reporting company has the full authority to introduce and implement its operating policies. This criterion is consistent with the current accounting and reporting practice of many companies that report on emissions from facilities, which they operate). The tool assumes operational control approach, but if you would like to use the financial control approach, simply provide data relating to operations over which you have financial control instead.
Companies should use a consistent consolidation approach over time for their entire inventory. For more details see the Greenhouse Gas Protocol.
What is an equity share approach?
This is a consolidation approach whereby a company accounts for GHG emissions from operations according to its share of equity in said operation. The equity share reflects economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. If you would like to recalculate your footprint according to this approach, please reach out to us using the chat bubble on the bottom left of your Reportwise screen.
What is an emissions factor?
To estimate GHG emissions per unit of available activity, carbon accountants use emission factors. These are coefficients which allow us to convert activity data, such as tonnes of fuel consumed or tonnes of product produced, into carbon emissions.
Do I have to provide emission factors?
No, all emissions factors for electricity and stationary fuel use are provided by default, but we also give the option for you to add specific emission factors if you have them. For example, if you have a specific green tariff for electricity, then your electricity supplier may provide an emission factor on the invoice or on their website.
For vehicle use, emission factors are required only if you select a reporting option of distance and emission factor. If you do not have emission factors for your vehicles then please select an alternative reporting option.
I rent space and I don’t know where to get electricity/fuel data?
Generally landlords are able to provide usage data for electricity/natural gas or other onsite fuel use, though a challenge may be to disaggregate if multiple occupiers of the space. If data is not available through smart meters for occupier use specifically, it is generally recommended to allocate usage based on the most appropriate metric available. For example, if you rent an office space in a communal office area, allocating according to number of full time employees or floor space can provide estimation of occupier use.
Do I need to include emissions from leased buildings and vehicles?
This can be a little complicated, but generally a good rule of thumb is if the company pays for the fuel/energy use, then that company is considered in control of the emissions. If the company is a tenant in a leased building, and does not pay directly for electricity/fuel, it is still considered to be in operational control and therefore should include these in scope 2/1 respectively if reporting under control approach (see also ‘what do you mean by ‘boundaries’ and which is the best approach?).
We do not record usage of our company vehicles. What do I do?
Even if you do not record the distance travelled, it is likely that your accounts department will have some documentation of fuel spend for company cars. This can be used for road vehicles. If you do not pay for the fuel use, then generally the emissions are not needed to be included within your reporting.
For other vehicles, such as rail or shipping vehicles, spend is not adequate for estimation due to the significant range of pricing and impact, so where possible actual fuel consumption or other physical metric is required.
Do I need to include the emissions from my tenants?
Not within this tool. Tenant emissions are considered in scope 3, part of your extended value chain GHG footprint. Best practice recommendations encourage scope 3 reporting, particularly where highly material. For example if your operate in the real estate sector and have a large property portfolio, tenant activity is likely to be highly material. Consider the Emitwise Pro if you wish to expand accounting to include value chain emissions as well.
How do I know if I have fugitive emissions?
Fugitive emissions are most significantly associated with either industrial equipment, HVAC (heating, ventilation and air conditioning) equipment and evaporation from waste water treatment and storage tanks. The Reportwise tool uses refrigerant replacement as a proxy for leakage of refrigerant in cooling systems, though other emissions will require direct measurement or estimation (see ‘how can I measure accidental leaks’).
How can I measure accidental leaks?
Without equipment, leakage measurement can be difficult, and replacement of resource is one way of estimating loss where it is clear the resource is not being consumed during processing (e.g. in refrigerant use). Gas detectors can be used to identify leaks and estimate leak rate. These are recommended for all sites with significant potential leakage. Though quantities leaked may be small, they can have very high impact to both global warming and human health.
Why do I need to report on refrigerant use?
A refrigerant is the working fluid in a refrigeration system. As such they have insulation properties which result in direct greenhouse global warming potential and therefore any leakage or emissions of these refrigerants have an impact on climate change. While it is unusual for many companies to to record the actual leakage of refrigerants from HVAC or other cooling systems, replacement of refrigerants from these systems is used as a proxy of leakage.