Sustainability reporting for UK manufacturing

A manufacturer sits inside several regimes at once

There is no single “manufacturing” reporting rule.

Instead, a manufacturer is pulled into a handful of separate regimes, each with its own legal basis, scope test and deadline.

Which ones apply turns on company size, energy use and listing status — not on the act of manufacturing as such.

A mid-sized private engineering firm and a listed industrial group face very different obligations.

What manufacturers do share is energy intensity.

Heat, motors and process emissions make energy use a material cost and a compliance focus, which is why the energy-led regimes — SECR and ESOS — tend to bite first.

SECR: energy and Scope 1 and 2 emissions

Streamlined Energy and Carbon Reporting is the obligation most manufacturers meet first. A company is “large” — and so in scope — if it exceeds two of three thresholds: turnover over £36m, balance sheet over £18m, or 250 employees^[1]. All quoted companies are also caught regardless of size.

SECR requires UK energy use, Scope 1 and Scope 2 greenhouse-gas emissions, at least one intensity ratio, and a narrative on the energy-efficiency actions taken in the year^[2]. The content sits in the Directors’ Report and is filed with the annual accounts.

For manufacturers, the choice of intensity ratio matters. Energy or emissions per tonne of product tracks operational efficiency directly; revenue-based ratios are simpler but move with pricing; floor-area ratios suit multi-product sites. The DBT Environmental Reporting Guidelines set out the methodology and the GHG Protocol basis^[3].

The full mechanics — thresholds, the two-year qualifying rule and where the disclosures sit — are covered in our SECR requirements guide.

ESOS Phase 4: a four-yearly energy audit

The Energy Savings Opportunity Scheme requires qualifying organisations to audit their energy use every four years. A UK group is caught if it employs 250 or more people, or has turnover above roughly £44m and a balance sheet above roughly £38m — thresholds denominated in euros in the regulations^[5].

Phase 4 began in December 2023 and runs to December 2027. The qualification date is 31 December 2026, and the notification-of-compliance deadline is 5 December 2027^[4].

The audit must cover at least 95 per cent of total energy consumption — the de minimis threshold was cut from 10 per cent to 5 per cent by the 2023 amendment, which also added Action Plans and progress reporting^[6].

Manufacturers certified to ISO 50001 across all their energy use can use that as an alternative compliance route, reducing the audit burden while evidencing continuous improvement^[4].

Our ESOS Phase 4 guide sets out qualification, the audit routes and the documentation pack in full.

UK ETS: direct regulation of process and combustion emissions

The UK Emissions Trading Scheme is a cap-and-trade scheme covering energy-intensive industry, power generation and aviation.

Unlike SECR or ESOS, it regulates emissions directly: installations carrying out regulated activities above defined capacity thresholds need a greenhouse-gas permit.

In scope are processes such as certain steel, cement, lime, glass, ceramics and chemicals operations, and combustion of fuels above 20 megawatts of thermal input.

If a site holds a permit, the duties follow each scheme year.

Operators must submit a verified annual emissions report by 31 March, and surrender allowances equal to their reportable emissions by 30 April of the following scheme year^[7].

Falling short carries a mandatory penalty of £100 per tonne of CO2 (indexed to inflation) for each allowance not surrendered^[7]. The carbon price a manufacturer faces under the ETS is also a climate-risk input that listed firms disclose under UK SRS S2.

Supply-chain Scope 3 emissions

SECR stops at Scope 1 and 2.

But for many manufacturers the larger emissions story sits in the value chain — in the materials and components bought upstream, and in how products are used and disposed of downstream.

The GHG Protocol Corporate Value Chain Standard defines fifteen Scope 3 categories: eight upstream and seven downstream^[9]. For a manufacturer, purchased goods and services (Category 1) and the use of sold products (Category 11) are often the dominant categories, though the balance varies sharply by sub-sector and is not a single fixed figure.

Scope 3 is not yet mandated for most manufacturers. It becomes a formal requirement under UK SRS S2 for in-scope listed companies, where the FCA has proposed a one-year transitional relief on Scope 3 from initial application^[8].

Even without a legal trigger, value-chain measurement matters: customers, lenders and procurement frameworks increasingly ask for it, and credible reduction targets depend on it. The practical work — supplier engagement, primary data versus spend-based estimates — is covered in our Scope 3 reporting guide.

Data systems and how to prioritise

The good news for manufacturers is that the regimes overlap at the data layer.

SECR, ESOS, the UK ETS and UK SRS S2 all rest on the GHG Protocol, so one robust energy and Scope 1 and 2 dataset can serve every one of them.

Start with what is binding and nearest. Confirm SECR scope for the current annual report, and check ESOS qualification ahead of the 5 December 2027 deadline^[4]. If any installation holds a UK ETS permit, the 31 March reporting and 30 April surrender duties are non-negotiable^[7].

Build the shared foundation next: metered energy by site and source, fuel and process data, and emission factors applied consistently.

This is the dataset that feeds SECR intensity ratios, ESOS audits and any future UK SRS reporting.

Treat Scope 3 as the layer that takes longest.

Begin with the categories most likely to be material — purchased materials and product use — and improve data quality over time, moving from spend-based estimates toward primary supplier data.

For the cross-regime picture beyond manufacturing, see our UK carbon reporting requirements guide.

UK manufacturing reporting: frequently asked questions