The Streamlined Energy and Carbon Reporting (SECR) requirements apply to all quoted companies and large unquoted companies and LLPs (Companies Act definition). Companies are required to report their UK energy use and associated intensity scope 1 and 2 emissions.
As a minimum, this should include electricity, gas and transport. An intensity metric is required, but metrics used can be decided by individual sectors and existing best practice and guidance. An exemption not to report where it is not practical to do so has also been provided. Narrative commentary on energy efficiency action taken is also required. SECR treats separate portfolio companies separately which is important for private equity fund portfolios. The new scheme is aligned with the current ESOS regime (see below) and allows for disaggregation.
SECR and the Climate Change Levy replaced the CRC scheme in 2019. The Government had acknowledged that the number and complexity of business energy efficiency taxes and reporting requirements made compliance for UK businesses difficult and changes were broadly welcomed. The BVCA had previously engaged on the CRC scheme as any private equity firm whose portfolio included a controlling stake in a company with UK operations needed to consider whether it was required to register with the Environment Agency as a CRC participant. The application of the Companies Act 2006 grouping tests to limited partnership structures is a complex and technical area, so the then Legal & Technical Committee sought the advice of leading corporate counsel, David Chivers QC, on the proper application of those tests in the context of the CRC legislation. The BVCA produced a note of guidance for members based on Counsel's advice, which is available below.
Helpful Links and BVCA Publications
- FRC review findings on SECR – September 2021
- BVCA feedback on SECR guidance – January 2019
- Technical Bulletin – November 2018 (SECR)
- BVCA response to SECR consultation – January 2018
- Technical Bulletin – May 2016 (End of CRC)
- BVCA response to HMT consultation on business energy efficiency tax landscape – November 2015
- BVCA recommendations to improve CRC (later shared for work on ESOS) – December 2010
- BVCA guidance on CRC, including Chivers Opinion – May 2010
Energy Savings Opportunity Scheme
The Energy Savings Opportunity Scheme is a mandatory energy assessment scheme for qualifying UK organisations, and private equity and venture capital firms should have reviewed the impact of this in 2015. Companies that qualify must carry out ESOS assessments every 4 years.