UK companies whose shares are quoted on the London Stock Exchange are already required to include environmental impact assessments in their annual reports.
From April 1st a number of large unquoted companies (and LLPs) must comply with the “Streamlined Energy and Carbon Reporting” (SECR) regulations (this can include not-for-profits and entities owned by universities or academies). The definition of ‘large’ will remain as defined in the Companies Act 2006, namely a company or LLP which in a year satisfies two or more of the following requirements:
- turnover £36 million or more
- balance sheet £18 million or more
- 250 employees or more
Inclusion will start for the first financial year commencing after April 2019, so qualifying companies with a pre-April year end will enjoy a grace period. In addition, companies defined as low energy users – i.e. consuming 40MWh or less during the reporting period – are exempt from full reporting and may state in a relevant report that energy use/carbon emission data is not disclosed for that reason.
Companies are required to define and measure a minimum of 3 KPIs associated with key environmental impacts. These are likely to include:
- greenhouse gases
- water
- waste
- materials and resource efficiency
- biodiversity/ecosystem services
- emissions to air, land and water
Measured parameters might include volume, costs, business importance or increasingly the concerns of stakeholders and investors. Liaison with both suppliers and customers will be necessary as upstream and downstream impacts are to be taken into account.
ICAEW has prepared some guidance on the reporting of environmental data which can be accessed here.
For the avoidance of doubt, SECR reporting is in addition to any obligations under ESOS Phase 2, the qualifying criteria for which are similar but not identical to SECR.
To discuss the issues highlighted above contact Steven Godfrey
The information contained in this article is for discussion purposes only. Auditel does not offer regulatory or legal advice and qualified professional guidance should be sought where appropriate.
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