GHG Protocol Corporate Standard
Measuring Scope 1 and 2 (and Scope 3 if asked)
UK customers reporting under UK SRS S2; SECR-style figures
Method standard, not a report format
Scope · SMEs
SME sustainability reporting UK
SME sustainability reporting in the UK is, for most small and medium-sized businesses, a commercial request rather than a legal duty.
The mandatory regimes stop at large and listed organisations, and the UK Sustainability Reporting Standards are voluntary for any business outside the FCA’s listed categories.
The requests come from customers, public-sector buyers and lenders — and each wants something slightly different.
The law
Why most SMEs have no statutory duty
Every UK sustainability reporting duty is drawn to catch large or listed organisations, and an SME is, by definition, neither.
Legal routeRequirements and evidence
Module 01 / 04
SECR
Exempt if two or more of £36m / £18m / 250 are not exceeded
Out, unless quoted
Module 02 / 04
ESOS
At least 250 employees, or over £44m turnover and over £38m balance sheet
Out by definition of large
Module 03 / 04
Companies Act climate disclosures
More than 500 employees, and traded, banking, insurance, AIM or over £500m turnover
Out
Module 04 / 04
FCA UK SRS rules
Listing category, no size test
Out, unless listed in a covered category
| Regime | Test | Typical SME |
|---|---|---|
| SECR | Exempt if two or more of £36m / £18m / 250 are not exceeded | Out, unless quoted |
| ESOS | At least 250 employees, or over £44m turnover and over £38m balance sheet | Out by definition of large |
| Companies Act climate disclosures | More than 500 employees, and traded, banking, insurance, AIM or over £500m turnover | Out |
| FCA UK SRS rules | Listing category, no size test | Out, unless listed in a covered category |
| UK SRS S1 and S2 | None | Voluntary |
Read the detailed guidance and evidence
Every UK sustainability reporting duty is drawn to catch large or listed organisations, and an SME is, by definition, neither.
SECR, created by SI 2018/1155, exempts an unquoted company that meets two or more of the paragraph 20B limits: turnover not more than £36 million, balance sheet not more than £18 million, not more than 250 employees.
Those limits did not move when SI 2024/1303 raised the Companies Act medium-sized limits to £54 million turnover and £27 million balance sheet from 6 April 2025.
So a company can be medium-sized in company law and still report under SECR.
ESOS reaches only a large undertaking under Schedule 1, and the Companies Act climate disclosures begin above 500 employees.
The FCA’s UK SRS rules apply only to companies listed in five UK Listing Rules categories; the scope detail is on UK SRS thresholds.
The SECR edge cases are on SECR thresholds, and the larger private company’s position on private companies and UK SRS.
The direction of travel for smaller companies
The government’s statement of 21 October 2025 proposes exempting up to 44,000 medium-sized private companies from the strategic report.
The Modernising corporate reporting consultation, open to 30 November 2026, proposes no UK SRS duty for any private company.
Who asks
Where the requests come from
An SME’s sustainability reporting is shaped by its customers’ obligations, so it helps to know which obligation is behind each request.
Evidence mapRequirements and evidence
Module 01 / 04
A listed UK customer
UK SRS S2 ¶29(a) Scope 3 emissions, comply or explain from 2027
Your Scope 1 and 2 emissions, or data to estimate them
Module 02 / 04
A central government or NHS buyer
PPN 006, for in-scope contracts above £5m a year
A Carbon Reduction Plan in the government format
Module 03 / 04
An EU customer
CSRD value-chain reporting
Datapoints from the EU voluntary standard
Module 04 / 04
A lender or investor
Their own disclosure or credit policy
Varies; often a short emissions and policy questionnaire
Read the detailed guidance and evidence
| Who is asking | The obligation behind it | What they usually need from you |
|---|---|---|
| A listed UK customer | UK SRS S2 ¶29(a) Scope 3 emissions, comply or explain from 2027 | Your Scope 1 and 2 emissions, or data to estimate them |
| A central government or NHS buyer | PPN 006, for in-scope contracts above £5m a year | A Carbon Reduction Plan in the government format |
| An EU customer | CSRD value-chain reporting | Datapoints from the EU voluntary standard |
| A lender or investor | Their own disclosure or credit policy | Varies; often a short emissions and policy questionnaire |
| A large UK customer outside the FCA rules | SECR — but its Scope 3 limb covers only transport fuel for unquoted companies | Rarely supplier emissions for SECR itself |
The request most SMEs meet first comes from a listed customer measuring its own value chain.
UK SRS S2 paragraph 29(a) asks for absolute gross Scope 1, 2 and 3 emissions, with the Scope 3 categories included, measured under the GHG Protocol Corporate Standard unless a jurisdiction requires otherwise.
A listed company may use a one-year Scope 3 relief under the FCA rules; for accounting periods beginning from 1 January 2028 it must report Scope 3 or explain why not.
So supplier requests tied to UK SRS are likely to sharpen for the 2028 reporting year rather than the first.
SECR is often blamed for these requests, but an unquoted company’s SECR report covers UK energy and transport fuel, not its suppliers’ emissions.
The fifteen Scope 3 categories are set out on Scope 3 under UK SRS.
Public contracts
Public-sector bids: the Carbon Reduction Plan
When the customer is a public body the request is formal and has a set format.
TargetsRequirements and evidence
Module 01 / 04
Threshold
Estimated contract value above £5m a year, including VAT, averaged over its life
Module 02 / 04
Applies to
Procurements commenced on or after 24 February 2025
Module 03 / 04
Emissions
Scope 1, Scope 2 and five Scope 3 categories
Module 04 / 04
Commitment
Net zero by 2050 in the UK
PPN 006 at a glance
| Element | What the note says |
|---|---|
| Threshold | Estimated contract value above £5m a year, including VAT, averaged over its life |
| Applies to | Procurements commenced on or after 24 February 2025 |
| Emissions | Scope 1, Scope 2 and five Scope 3 categories |
| Commitment | Net zero by 2050 in the UK |
| Legal nature | A condition of participation, not a duty on companies |
Read the detailed guidance and evidence
When the customer is a public body the request is formal and has a set format.
PPN 006 asks in-scope contracting authorities to make a Carbon Reduction Plan a condition of participation for contracts above £5 million a year, including VAT.
The threshold is per contract, not per supplier and not a total of a supplier’s government work.
The technical standard requires Scope 1 and 2 in full, plus five Scope 3 categories: upstream transport, waste, business travel, employee commuting and downstream transport.
It excludes purchased goods and services, so a plan is not a full Scope 3 inventory.
SMEs that bid often reuse the same emissions answers across submissions, sometimes with AI tender software built for smaller suppliers — the plan is one part of a public sector tender, alongside price and social value.
Some bring in a fractional sustainability lead for a few days a month to prepare the plan rather than making a full-time hire.
Frameworks
Frameworks for a small business, compared
There is no single sustainability report framework for small business in UK law; the right one is the one your audience will read.
Frameworks for a small business, compared
PPN 006 Carbon Reduction Plan
A published plan in the government format
Bids for in-scope public contracts above £5m a year
Scope 1, 2 and five Scope 3 categories
EU voluntary standard (VSME)
Basic Module B1–B11; Comprehensive Module C1–C9
EU customers reporting under the CSRD
In force 24 September 2026; EU law
UK SRS S1 and S2
Investor-focused disclosures
A company preparing to list, or asked by investors
Voluntary; heavy for a small business
Read the detailed guidance and evidence
| Framework | What it is | Who it answers | Note |
|---|---|---|---|
| GHG Protocol Corporate Standard | Measuring Scope 1 and 2 (and Scope 3 if asked) | UK customers reporting under UK SRS S2; SECR-style figures | Method standard, not a report format |
| PPN 006 Carbon Reduction Plan | A published plan in the government format | Bids for in-scope public contracts above £5m a year | Scope 1, 2 and five Scope 3 categories |
| EU voluntary standard (VSME) | Basic Module B1–B11; Comprehensive Module C1–C9 | EU customers reporting under the CSRD | In force 24 September 2026; EU law |
| UK SRS S1 and S2 | Investor-focused disclosures | A company preparing to list, or asked by investors | Voluntary; heavy for a small business |
| ISO 14001 | An environmental management system, certified by a third party | Customers who ask for a management system | A management standard, not a disclosure standard |
| B Corp | An impact assessment and a change to the articles | Companies wanting a whole-business credential | A certification, not a reporting standard |
Most SMEs need a method before they need a framework: an emissions figure measured one consistent way.
The GHG Protocol Corporate Standard is that method for UK customers, and the Carbon Reduction Plan and the EU voluntary standard both draw on it.
UK SRS can be used by a small business, but it asks for information about risks to cash flows and cost of capital that investors want; it suits a company preparing to raise capital or list more than one answering a supplier questionnaire.
Certifications answer a different question from reporting standards; they are covered on ISO 14001 and B Corp certification.
Choosing UK SRS voluntarily, with its untimed reliefs, is set out on voluntary UK SRS reporting.
The EU route
The EU’s voluntary standard, and a UK SME
The EU has written a sustainability reporting standard specifically for smaller companies, and a UK business that sells into the EU will meet it.
Voluntary routeRequirements and evidence
Module 01 / 04
Disclosure
The EU has written a sustainability reporting standard specifically for smaller companies, and a UK business that sells into the EU will meet it.
Module 02 / 04
Disclosure · 2
Delegated Regulation (EU) 2026/1560 sets out a Basic Module of disclosures B1 to B11 and a Comprehensive Module C1 to C9.
Module 03 / 04
Key point 03
It grew out of EFRAG’s VSME project, now concluded; from its entry into force the Commission’s 2025 Recommendation on the same subject no longer has legal effect.
Module 04 / 04
Voluntary route
Under Directive (EU) 2026/470, undertakings with 1,000 employees or fewer have the right to decline to provide information beyond what the voluntary standard specifies.
Two dates, two clocks
The Delegated Regulation entered into force on 24 September 2026.
The value-chain cap it defines applies from financial years beginning on or after 1 January 2027.
Read the detailed guidance and evidence
The EU has written a sustainability reporting standard specifically for smaller companies, and a UK business that sells into the EU will meet it.
Delegated Regulation (EU) 2026/1560 sets out a Basic Module of disclosures B1 to B11 and a Comprehensive Module C1 to C9.
It grew out of EFRAG’s VSME project, now concluded; from its entry into force the Commission’s 2025 Recommendation on the same subject no longer has legal effect.
Under Directive (EU) 2026/470, undertakings with 1,000 employees or fewer have the right to decline to provide information beyond what the voluntary standard specifies.
The cap covers only a closed list of datapoints in Annex II of the Regulation, so it is narrower than the standard itself.
It is EU law and imposes nothing on a UK company; its practical value to a UK SME is as a ready-made answer to EU customers’ questions.
Getting started
A proportionate first year, in five steps
This is our indicative sequence for a business with no reporting yet; it is not a regulatory timetable, because none exists for SMEs.
- 1
Disclosure
This is our indicative sequence for a business with no reporting yet; it is not a regulatory timetable, because none exists for SMEs. - 2
Targets
First, list who is asking and what each request actually contains, because a Carbon Reduction Plan and a supplier questionnaire overlap only partly. - 3
Scope 1
Second, measure Scope 1 and 2 from fuel, electricity and vehicle records, following the GHG Protocol Corporate Standard; energy bills are the usual starting point, and a household bills calculator shows the same unit-rate arithmetic on a smaller scale. - 4
Oversight
Third, decide the format: the government template for a public bid, the EU voluntary standard for EU customers, or a short statement for everyone else.
Read the detailed guidance and evidence
This is our indicative sequence for a business with no reporting yet; it is not a regulatory timetable, because none exists for SMEs.
First, list who is asking and what each request actually contains, because a Carbon Reduction Plan and a supplier questionnaire overlap only partly.
Second, measure Scope 1 and 2 from fuel, electricity and vehicle records, following the GHG Protocol Corporate Standard; energy bills are the usual starting point, and a household bills calculator shows the same unit-rate arithmetic on a smaller scale.
Third, decide the format: the government template for a public bid, the EU voluntary standard for EU customers, or a short statement for everyone else.
Fourth, put one named person in charge of the figures, so next year’s numbers use the same method.
Fifth, check each year whether growth has taken you over the SECR or ESOS lines; the UK SRS compliance page and the regime pages above give the tests.
A free 15-minute call with an independent specialist can be booked on the booking page.
Government strategies are not reporting duties
The Net Zero Strategy of 2021 and the earlier Industrial Strategy, withdrawn on 1 March 2023, set out policy aims; neither requires any business to report.
Practical guidance for small firms is published by the Carbon Trust.
By sector
What each sector tends to be asked
Energy use, process emissions, waste and materials
Evidence mapRequirements and evidence
Module 01 / 04
Manufacturing
Energy use, process emissions, waste and materials
Module 02 / 04
Professional services
Office energy, business travel, and whether you have a policy
Module 03 / 04
Construction
Site fuel, materials and the project’s own sustainability criteria
Module 04 / 04
Technology and digital
Data-centre and cloud energy, hardware lifecycle
Read the detailed guidance and evidence
| Sector | The questions that usually arrive first |
|---|---|
| Manufacturing | Energy use, process emissions, waste and materials |
| Professional services | Office energy, business travel, and whether you have a policy |
| Construction | Site fuel, materials and the project’s own sustainability criteria |
| Technology and digital | Data-centre and cloud energy, hardware lifecycle |
| Transport and logistics | Fleet fuel and vehicle mix — Scope 1 for you, Scope 3 for your customer |
| Food and agriculture | Land use, water and packaging |
Frequently asked
Questions people ask
Is sustainability reporting mandatory for SMEs in the UK?
Usually not.
The UK's mandatory regimes — SECR, ESOS and the Companies Act climate-related financial disclosures — are aimed at quoted companies and large organisations, and the UK Sustainability Reporting Standards are voluntary for any entity outside the FCA's listed categories.
A small or medium-sized private company normally has no statutory sustainability reporting duty.
What sustainability report framework suits a small business?
It depends on who is asking.
For a UK customer reporting under UK SRS, emissions measured under the GHG Protocol Corporate Standard are what flows into their figures.
For a public-sector bid above the PPN 006 threshold, a Carbon Reduction Plan in the government's format.
For an EU customer, the EU voluntary standard for SMEs, in force since 24 September 2026.
UK SRS itself can be used voluntarily but was written for companies reporting to investors.
When does SECR apply to a company?
A quoted company reports under SECR at any size.
A large unquoted company or LLP reports unless it meets two or more of: turnover not more than £36 million, balance sheet total not more than £18 million, not more than 250 employees.
SECR's limits did not change when the Companies Act size thresholds rose in April 2025.
Why are my customers asking for our carbon data?
Usually because of their own reporting.
A listed customer reporting against UK SRS S2 discloses Scope 3 emissions, which include emissions from the goods and services it buys, or explains why not; the one-year Scope 3 relief in the FCA rules delays that for the first year.
Public-sector buyers ask bidders for Carbon Reduction Plans on large contracts, and EU customers reporting under the CSRD gather value-chain data.
Do I need a Carbon Reduction Plan to bid for public contracts?
Only where the contracting authority applies PPN 006 to the procurement and the contract's estimated value is above £5 million a year including VAT, averaged over its life.
It is a condition of participation for that contract, not a legal duty to hold a plan.
The plan covers Scope 1 and 2 emissions, five Scope 3 categories and a commitment to net zero by 2050.
What is the VSME standard?
It is the EU's voluntary sustainability reporting standard for undertakings protected by the CSRD value-chain cap, adopted as Commission Delegated Regulation (EU) 2026/1560 and in force since 24 September 2026. It has a Basic Module and a Comprehensive Module.
It is EU law, not UK law, but a UK SME can use it voluntarily, and EU customers may ask for its datapoints.
Will UK SRS become mandatory for SMEs?
Nothing proposes that.
The Modernising corporate reporting consultation, open until 30 November 2026, says only that the government will consider how UK SRS should be reflected in the Companies Act.
The earlier October 2025 announcement goes the other way for smaller companies: it proposes exempting most medium-sized private companies from the strategic report.
Prepare the evidence
SME sustainability reporting UK: from a requirement to a reporting pack
Use this preparation sequence alongside the detailed requirements on this page.
An editorial workflow, not a statutory schedule.
- Stage 0101
Applicability
Record the listing category or voluntary reporting decision.
- Stage 0202
Period and boundary
Set the reporting entity and period before collecting disclosures.
- Stage 0303
Materiality
Document the financial materiality judgements behind the disclosures.
- Stage 0404
Governance and strategy
Connect oversight, strategy and risk management to the reporting evidence.
- Stage 0505
Metrics and reliefs
Record methods, estimates, targets and any relief actually used.
- Stage 0606
Connected publication
Reconcile the disclosure pack with the annual report and approval record.
Read the applicable instrument: SI 2008/410 Schedule 7 Part 7A ¶20B (SECR exemption test)
A practical brief
An evidence pack, with a clear review trail
Ask for a pack that lets the next reviewer retrace the scope decision, follow the evidence and understand the limitations.
This describes a useful handover; it does not certify compliance or establish that a vendor or adviser delivers it.
Trace the answerScope → evidence → review
Module 01 / 04
Applicability record
Write down the entity, reporting route and relevant period, including why the route applies.
Module 02 / 04
Evidence register
Attach each reported figure or statement to its source, method, version and limitations.
Module 03 / 04
Review trail
Name the preparer, reviewer, open questions and decisions taken before publication.
Module 04 / 04
Usable handover
Retain the working files and unresolved actions so the next reporting cycle can reuse the evidence.
View the preparation diagram
- Prepare01
Create the traceable pack
Keep the input records, calculation files and narrative together.
- Challenge02
Resolve questions before publication
Record the assumptions challenged and any limitations still unresolved.
- Retain03
Make the next cycle reproducible
Keep the approved version and the actions carried forward.
Illustrative example
Answer a customer request without claiming more
Imagine a small supplier receiving a sustainability questionnaire from a customer.
A fictional preparation exercise, not a case study or a determination of compliance.
Follow the evidenceQuestion → record → answer
Module 01 / 04
The request
Keep the customer’s question and the requested reporting boundary.
Module 02 / 04
Existing records
Identify the activity data and policies already held.
Module 03 / 04
Limitations
State which figures are estimates and which information is unavailable.
Module 04 / 04
The answer
Explain the reporting basis without claiming compliance with an entire standard.
Before publication
Four questions, before the claim leaves the page
Use these questions to expose assumptions that a polished report can otherwise conceal.
Challenge the answerMake the limits visible
Module 01 / 04
Purpose
Is this a customer request, a legal duty or a voluntary disclosure?
Module 02 / 04
Boundary
Does the answer cover this supplier or its wider group?
Module 03 / 04
Evidence
Can the customer follow each figure to an input?
Module 04 / 04
Proportion
Can the same evidence answer the next request?
Continue your research
Related guides, one question at a time
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
Checked against 20 sources fromlegislation.gov.ukFinancial Conduct AuthorityDepartment for Business and TradeFinancial Reporting CouncilDepartment for Business, Innovation, Science and TradeUK Parliament
- legislation.gov.ukSI 2008/410 Schedule 7 Part 7A ¶20B (SECR exemption test)
Two or more of: turnover not more than £36m; balance sheet not more than £18m; not more than 250 employees.
- legislation.gov.ukSI 2018/1155 — the SECR Regulations
In force 1 April 2019.
- legislation.gov.ukSI 2024/1303 — company size thresholds uplift
Medium-sized limits to £54m and £27m from 6 April 2025; SECR untouched.
- legislation.gov.ukSI 2014/1643 Schedule 1 (ESOS large undertaking)
- legislation.gov.ukCompanies Act 2006
Strategic report and climate-related financial disclosure duties.
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards
Listed companies only; comply or explain from 2027.
- Financial Conduct AuthorityPS26/19 (PDF), ¶¶3.14, 3.23
One-year Scope 3 relief; comply or explain from periods beginning 1 January 2028.
- Financial Conduct AuthorityCP26/5 (PDF)
The consultation the final rules replaced.
- Financial Conduct AuthorityCP26/5 landing page
- Department for Business and TradeUK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2
Voluntary for any entity.
- Department for Business and TradeUK SRS S2 (PDF), ¶29(a)
Scope 1, 2 and 3 emissions, including Scope 3 categories.
- Financial Reporting CouncilSustainability reporting developments: frequently asked questions
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation, to 30 November 2026
- UK ParliamentWritten Ministerial Statement HCWS973, 21 October 2025
Strategic report exemption for up to 44,000 medium-sized private companies.
- Cabinet OfficePPN 006: Taking account of Carbon Reduction Plans in the procurement of major government contracts
Above £5m a year including VAT; procurements from 24 February 2025.
- Cabinet OfficePPN 006 Technical Standard for Completion of Carbon Reduction Plans
Scope 1, Scope 2 and five Scope 3 categories.
- GHG ProtocolA Corporate Accounting and Reporting Standard
The measurement basis UK SRS S2 ¶29(a) names.
- EUR-LexCommission Delegated Regulation (EU) 2026/1560 — the voluntary standard
In force 24 September 2026; the value-chain cap from financial years beginning 1 January 2027.
- EFRAGVoluntary reporting standard for SMEs (VSME) — concluded project
- EUR-LexDirective (EU) 2026/470 (Omnibus I)
The value-chain cap for undertakings with 1,000 employees or fewer.
Continue reading
Read next
Scope
Private companies and UK SRS
Why no private-company UK SRS threshold exists, and what the MCR consultation says.
Voluntary
Voluntary UK SRS reporting
Reliefs, compliance statements and the Companies Act route for voluntary users.
SECR
SECR thresholds
The two-of-three exemption test as Schedule 7 writes it.