Complying with Legislation
We’ve now helped a variety of businesses comply with the two main energy legislation requirements:
SECR - Streamlined Energy & Carbon Reporting
ESOS - Energy Saving Opportunity Scheme
This legislation came into effect on 1st April 2019 and requires large UK companies to publicly report on their energy use, carbon emissions and energy efficiency actions. It replaced the reporting aspects of the previous CRC & MGHGR legislation.
It is implemented by way of the directors’ report within annual company accounts, rather than requiring any additional filings with Companies House or another regulator. The report must include a narrative on energy efficiency actions taken during the financial year.
SECR applies to:
All quoted companies.
Large UK incorporated unquoted companies which meet two of the following three criteria within a financial year. These are having:
250 employees or more
Annual turnover greater than £36m
Annual balance sheet total greater than £18m
UK subsidiaries that qualify for SECR will not be required to report if they are covered by a parent’s group report.
It applies to annual reports for financial years which start on or after 1st April 2019.
This legislation works on a four year compliance cycle and requires qualifying business to assess their energy consumption and identify opportunities for savings. The current compliance phase runs from 6th December 2019 - 5th December 2023. So this will need to be completed by 5th December 2023.
ESOS applies to any company that on the qualification date of 31st December 2022 employs more than 250 people (either part time or full time). Companies with less than 250 employees will also be required to complete ESOS if their turnover exceeds €50m AND they have a balance sheet exceeding €43m. Failure to comply could lead to a penalty of up to £50k and / or a daily fine of £500 for late compliance up to a maximum of 80 days.
The regulations require companies to measure their energy use across their operations (this includes vehicle fuel), identify areas of significant energy consumption and carry out audits on these areas. The process then has to be signed off by a registered Lead Assessor (Richard Felgate and Jim Sharman of HES are Lead Assessors). An evidence pack also has to be prepared which the Environment Agency may request to see.
So for a multi-site business, this usually means auditing a representative sample of businesses (often 10% - 20%) and reviewing data for the whole business including any offices and transport. The data review has to include 12 months of continuous data and the data set must include the qualification date of 31st December 2022.