New streamlined energy and carbon reporting scheme outlined

Friday 27th July, 2018

Following the announcement in the March 2016 budget a consultation on a new Streamlined Energy and Carbon Reporting scheme was released and the Government has now published their response, giving us the first guidelines as to what the new reporting scheme may look like.

The new scheme is proposed to largely align with the current Mandatory GHG reporting scheme. It will be effective from April 2019 once the CRC scheme is scrapped and will extend the number of companies doing annual reporting on energy and carbon from around 1,200 to 11,900, about the same number as are in ESOS. The main points of interest are below.

  • The scheme will apply to all UK quoted companies (the same as Mandatory GHG reporting) but will also include large unquoted companies (based on at least 250 employees or annual turnover greater than £36m and annual balance sheet greater than £18m)
  • Exemptions will be in place for those using very low amounts of energy (less than 40,000 kWh in their financial year) and for companies not registered in the UK.
  • All those in scope will need to include in their annual directors report a section on Energy and Carbon including information on:
    • The current and previous financial year
    • An intensity metric
    • Scope 1 and 2 emissions, Scope 3 being voluntary. Electricity, gas and transport must be included as a minimum
    • Quoted companies will report on global emissions as with the current Mandatory GHG reporting, unquoted companies will report on UK emissions.
    • A narrative commentary on energy efficiency action taken in the financial year.

The first three elements of information companies need to report are the same as the current Mandatory GHG reporting scheme, the difference being the expansion of those in scope. There will not be a requirement to disclose ESOS recommendations or how they have been taken forward, although this can be done, and the exemption for information not practical to find remains in place.

The next step is for Government to release the legislation advising exactly how all of this will work in practice, so watch this space for further updates.