SECR reporting thresholds

What SECR is

Streamlined Energy and Carbon Reporting (SECR) is the UK regulatory regime requiring large companies and LLPs to disclose their energy use and greenhouse gas emissions in their annual reports. SECR operates under the Companies (Directors\' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 20181 (SI 2018/1155), which became effective on 1 April 2019.

The regulations1 amend the Companies Act 20065 sections 416-419 (Directors\' Report content) and the Limited Liability Partnerships (Accounts and Audit) Regulations 20087 to insert energy and carbon disclosure requirements. The regime applies to financial years starting on or after 1 April 20191.

SECR consolidated and extended an earlier regulatory regime — the 2013 Mandatory Carbon Reporting (MCR) regulations8, which applied to quoted companies only. The 2018 SECR Regulations1 retained quoted company requirements (with some enhancements) and extended similar disclosure obligations to large unquoted companies and large LLPs.

Quoted companies (all sizes)

All UK incorporated quoted companies are in SECR scope regardless of size1. There is no minimum threshold for quoted companies — even small quoted companies must comply with SECR disclosure requirements.

The Companies Act 2006 section 3854 defines "quoted company" as a company whose equity share capital is officially listed on:

• A UK regulated market (i.e., Main Market of the London Stock Exchange — UKLR listed [4])
• An EEA regulated market [4]
• The New York Stock Exchange (NYSE) [4]
• The NASDAQ stock exchange [4]

Companies admitted to AIM are NOT "quoted" within the meaning of Companies Act 2006 section 3854. AIM-listed companies may be in SECR scope as large unquoted companies if they meet the large size thresholds2, but they are not automatically in scope by virtue of AIM admission alone.

Quoted companies have continuity with the 2013 Mandatory Carbon Reporting regulations8, which applied similar disclosure requirements to the same population. The SECR1 requirements for quoted companies are slightly enhanced versions of the 2013 framework.

Large unquoted companies

Large UK incorporated unquoted companies are in SECR scope if they meet the "large" definition under Companies Act 2006 sections 465-46723. This is the two-of-three test examined in detail below.

The category covers most large UK private companies, including1:

• Private equity portfolio companies above the size thresholds per section 465 [2]
• Family-owned businesses meeting two of three thresholds [2]
• AIM-listed companies above the size thresholds (note: AIM is not 'quoted' under s.385 [4])
• Subsidiaries of overseas parents where the UK subsidiary meets the thresholds [2]
• Holding companies and operating companies within UK groups [1]

Disclosure requirements are less comprehensive than quoted companies — UK-only energy and Scope 1 and 2 emissions (rather than the quoted company global basis)1. The Directors\' Report5 is the disclosure location.

Large LLPs

UK Limited Liability Partnerships meeting the "large" definition are in SECR scope under the LLP amendments inserted by SI 2018/115517. The two-of-three test applies to LLPs on the same basis as companies — turnover £36m+2, balance sheet total £18m+2, employees 250+2, with two of three required.

LLPs disclose in an "Energy and Carbon Report"1 parallel to the Directors\' Report for companies. The content requirements are equivalent to those for large unquoted companies — UK energy use, UK Scope 1 and 2 emissions, intensity ratio, methodology, prior year comparative, and energy efficiency action information1.

LLPs are common in legal, accounting, financial advisory, asset management, and consulting sectors. Large LLPs in these sectors typically fall within SECR scope and have annual SECR reporting obligations1.

The two-of-three test

The "large" definition for SECR purposes uses the Companies Act 2006 sections 465-467 thresholds23. An entity is "large" if it exceeds at least TWO of three thresholds in the financial year:

• Annual turnover above £36 million [2]
• Balance sheet total above £18 million [2]
• Average number of employees above 250 [2]

Meeting only one threshold is insufficient — at least two must be exceeded together2. The logic differs fundamentally from ESOS11 qualification, where the employee test alone qualifies, and the financial route requires BOTH financial thresholds.

The Companies Act 2006 definitions2 apply consistently across UK accounting and disclosure regulations. Entities classified as "large" for SECR purposes are typically also "large" for other Companies Act purposes — Strategic Report content requirements, audit thresholds, and reduced disclosure exemptions.

Thresholds explained in detail

Each of the three thresholds has specific measurement rules under Companies Act 20062:

Turnover (above £36 million)

"Turnover" follows Companies Act 2006 definitions2 — net amounts of revenue derived from the sale or other realisation of goods and services after deduction of trade discounts, value added tax, and any other taxes based on the amounts so derived. For group accounts, consolidated group turnover applies. For non-group entities, single-entity turnover applies. The threshold is exceeded if turnover is GREATER THAN £36 million2; exactly £36 million does not meet the threshold.

Balance sheet total (above £18 million)

"Balance sheet total" means the aggregate of the amounts shown as assets in the balance sheet2 — that is, total assets gross of liabilities. For group accounts, consolidated group total assets apply. The threshold is exceeded if balance sheet total is GREATER THAN £18 million2.

Average employees (above 250)

"Average number of employees" is calculated by determining the number of persons employed under contracts of service in each month of the financial year, summing those monthly figures, and dividing by the number of months in the financial year2. For group accounts, the average is across the group. The threshold is exceeded if the average is GREATER THAN 2502 — exactly 250 does not meet the threshold.

The two-year qualifying rule

Companies Act 2006 section 4673 introduces a two-year rule that affects when an entity transitions in or out of "large" status. An entity remains in its current size category (small, medium, large) for a financial year if it was in that category in the preceding year, UNLESS the qualifying conditions are not met in BOTH the current and preceding years3.

Applied to SECR transitions1:

• Small/medium entity that exceeds large thresholds in one year only — remains small/medium for SECR purposes per section 467 [3]
• Small/medium entity that exceeds large thresholds in two consecutive years — becomes large from the second year [3]
• Large entity that drops below thresholds in one year only — remains large for SECR purposes per section 467 [3]
• Large entity that fails to meet thresholds in two consecutive years — becomes medium/small from the second year [3]

This means that one-off fluctuations (a single large acquisition, an unusual revenue year, a temporary headcount spike) do not immediately change SECR scope. The two-year rule3 provides stability for reporting entities.

Low energy users (40,000 kWh)

SI 2018/11551 introduces a "low energy user" simplified disclosure route for entities using 40,000 kWh or less of UK energy in the financial year. Low energy users:

• Remain in SECR scope if they meet the size thresholds [1]
• May submit a simplified disclosure declaring low-energy user status [1]
• Are not required to provide full energy and emissions disclosure [1]
• Must still include the low-energy statement in the Directors' Report or Energy and Carbon Report [5]

The 40,000 kWh threshold1 applies to UK energy use covering electricity, gas, and transport fuels for which the entity is responsible. The threshold is calibrated to exempt service businesses and small office operations from full disclosure while keeping them within the regime.

Common low-energy user categories6:

• Small professional services firms (consulting, legal, accounting)
• Holding companies with no operational activity
• Asset management LLPs with limited physical operations
• Subsidiaries with no significant UK operations (but with UK incorporation)

What must be disclosed

SI 2018/11551 establishes different disclosure content for the three entity types. Quoted company disclosures are the most comprehensive; large unquoted company and large LLP disclosures are slightly reduced.

Quoted companies — comprehensive disclosure

• UK and offshore area energy use (electricity, gas, transport fuels) [1]
• UK and offshore area Scope 1 and Scope 2 GHG emissions [1]
• Global Scope 1 and Scope 2 GHG emissions (worldwide group basis) [1]
• At least one intensity ratio (e.g. tonnes CO2e per million pounds revenue, per FTE, per square metre) [1]
• Methodology used for calculation (GHG Protocol Corporate Standard [9] is the typical reference) [6]
• Previous year comparative for all metrics [1]
• Energy efficiency action information — description of actions taken in the year to improve energy efficiency [1]

Large unquoted companies — UK-focused disclosure

• UK energy use (electricity, gas, transport fuels) [1]
• UK Scope 1 and Scope 2 GHG emissions [1]
• At least one intensity ratio [1]
• Methodology used (GHG Protocol Corporate Standard [9] typical) [6]
• Previous year comparative [1]
• Energy efficiency action information [1]

Large LLPs — equivalent to large unquoted companies

Same content as large unquoted companies, disclosed in the LLP Energy and Carbon Report1 parallel to the Directors\' Report.

The DBT Environmental Reporting Guidelines6 provide detailed methodology guidance for SECR disclosure, including emission factors, organisational boundary setting (financial control approach typical), and intensity ratio selection.

Where SECR sits in the annual report

SECR disclosures sit within the Directors\' Report under Companies Act 2006 sections 416-4195 as amended by SI 2018/11551. For LLPs, the equivalent disclosure is the Energy and Carbon Report introduced by the LLP amendments17.

The Directors\' Report sits within the annual report and accounts5, alongside the Strategic Report, financial statements, and (where applicable) the Corporate Governance Report. The Directors\' Report is subject to the existing audit framework — the statutory auditor confirms consistency of the Directors\' Report with the financial statements5.

Practical placement:

• Most SECR-reporting entities present SECR disclosures as a dedicated section within the Directors' Report titled 'Streamlined Energy and Carbon Reporting' or similar
• Some entities integrate SECR content with broader sustainability disclosure or TCFD-aligned content where they also report under those frameworks
• For groups, the parent company Directors' Report typically includes consolidated group SECR disclosure; subsidiary entities may be exempt if their disclosure is included in the parent's consolidated report [1]
• iXBRL tagging of SECR content is not currently mandatory for non-listed entities, though some entities tag voluntarily

Exemptions and exclusions

Certain entities are out of SECR scope or qualify for exemption1:

• Small and medium-sized entities — entities not meeting the two-of-three large threshold test [2], except for quoted companies which are in scope regardless of size [1] [4]
• Subsidiary companies — exempt if the parent's consolidated accounts include SECR disclosure for the group [1]
• Charity companies — operate under separate charity reporting frameworks (Statement of Recommended Practice for charities)
• Public sector bodies — operate under separate public sector energy efficiency frameworks (e.g. Greening Government Commitments)
• Dormant companies — companies with no significant business activity have no meaningful energy use to disclose
• Low energy users (40,000 kWh or less) — remain in scope but qualify for simplified disclosure [1]

Entities near the threshold or with unusual structures (mixed public/private group, dormant trading subsidiaries, charity with substantial trading activity) should take legal advice on their specific position.

SECR vs ESOS — different thresholds

SECR1 and ESOS11 are both UK regulatory regimes covering energy and emissions, but they apply different qualification logic, different thresholds, and produce different disclosure outputs.

Qualification logic

• SECR — two of three thresholds: turnover > £36m, balance sheet > £18m, employees > 250 [2]
• ESOS — employee test 250+ alone, OR financial test £44m turnover AND £38m balance sheet (BOTH) [11]

Scope outcomes for hypothetical entities

• Entity with £37m turnover and £20m balance sheet (200 employees): SECR in scope (two of three met) [2]; ESOS NOT in scope (only one of financial pair met, employee threshold not met) [11]
• Entity with 251 employees and £40m turnover (£15m balance sheet): SECR in scope (two of three: employees + turnover) [2]; ESOS in scope (employee threshold met) [11]
• Entity with 200 employees and £35m turnover and £45m balance sheet: SECR NOT in scope (only balance sheet exceeds [2]); ESOS NOT in scope (employee not met, only one of two financial thresholds met) [11]
• Entity with 300 employees and £30m turnover and £15m balance sheet: SECR NOT in scope (only employees meets threshold [2]); ESOS in scope (employee test alone qualifies [11])

The practical effect: SECR generally captures a broader population than ESOS at smaller entities, while ESOS has higher financial thresholds11. Many large UK organisations are in scope of both regimes simultaneously.

Disclosure timing and content

• SECR — annual disclosure in Directors' Report or Energy and Carbon Report; energy use, Scope 1 and 2 emissions, intensity ratio [1]
• ESOS — four-yearly energy audit notification to Environment Agency, plus Action Plan and Progress Updates [11]

The data infrastructure overlap is substantial — energy consumption by site, GHG calculations using GHG Protocol methodology9, intensity metrics — supports both regimes. Organisations subject to both should run integrated programmes.

SECR and UK SRS — continuing alongside

SECR1 continues to apply alongside UK SRS10. The two are distinct regimes with different legal bases, scope determinants, and disclosure expectations.

Legal basis and scope110:

• SECR — Companies Act 2006 amendments via SI 2018/1155, applying to large UK entities by size [1] [2]
• UK SRS — published by DBT in February 2026 [10], applied via FCA CP26/5 for listed companies in UKLR categories from January 2027; private extension awaiting MCR Strand 2 consultation

Coverage110:

• SECR — Scope 1 and Scope 2 GHG emissions, limited Scope 3 via transport, UK-focused (with global for quoted companies) [1]
• UK SRS S2 — Scope 1, 2, and 3 across 15 GHG Protocol categories [9], with FI-specific financed emissions (paragraphs B59-B66 [10]), worldwide group basis

Materiality and forward-looking elements10:

• SECR — rule-based disclosure of historical data, no scenario analysis, no transition plan, no forward-looking financial effects [1]
• UK SRS — judgement-based materiality (paragraph 17), scenario analysis (paragraph 22), transition plan disclosure (paragraph 14(a)(iii)), anticipated financial effects (paragraphs 18-21) [10]

Where UK SRS S210 becomes mandatory (listed companies under CP26/5, or future MCR Strand 2 private companies), SECR1 continues to apply alongside. The two regimes coexist; UK SRS is investor-facing strategic disclosure; SECR is operational annual reporting of energy and emissions data. The MCR Strand 2 consultation expected during 2026 may address how the two regimes interact for in-scope entities.

Frequently asked questions