SECR carbon reporting: a practical calculation guide

What a SECR calculation actually is

At its core, every SECR figure is the same arithmetic: an item of activity data multiplied by an emission factor.

Burn a known quantity of gas, draw a known number of kilowatt-hours from the grid, drive a known distance — multiply each by the right factor and you have an emission in tonnes of carbon dioxide equivalent.

The methodology comes from the GHG Protocol Corporate Accounting and Reporting Standard, with the UK-specific detail set out in the DBT (formerly BEIS) Environmental Reporting Guidelines, first published in March 2019^[3].

The factors themselves are the UK government greenhouse gas conversion factors, which the Department for Energy Security and Net Zero (DESNZ) publishes annually^[1]. The obligation to report sits in the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, in force from 1 April 2019^[2].

For who is caught and which size tests apply, see our SECR requirements and SECR thresholds pages. This guide assumes you are in scope and focuses on the calculation itself.

Set the organisational boundary first

Before any factor is applied, decide which operations belong inside the report. The GHG Protocol offers two organisational-boundary approaches: the equity-share approach, where a company counts emissions in proportion to its ownership interest, and the control approach, where it counts the full emissions of operations it controls — measured either by financial control or operational control^[4].

Most SECR reporters use a control approach because it aligns with how the group is consolidated in the financial statements.

The key discipline is consistency: the boundary used for SECR should match the boundary used elsewhere in the annual report, and it should not move from one year to the next without explanation.

Then fix the operational boundary: which emission sources are Scope 1 and which are Scope 2. SECR requires Scope 1 and Scope 2, and the energy underlying them; Scope 3 is voluntary under SECR^[2].

Scope 1 and Scope 2 under the GHG Protocol

Scope 1 is direct emissions from sources the organisation owns or controls: gas boilers and furnaces, oil heating, on-site generators, company vehicles, and fugitive emissions such as refrigerant leakage^[4].

Scope 2 is the indirect emissions from purchased electricity, heat or steam — energy generated elsewhere but consumed by the organisation^[4].

Scope 3 covers the rest of the value chain — purchased goods and services, business travel, commuting, waste and so on. The GHG Protocol Corporate Value Chain Standard sets out fifteen Scope 3 categories^[4]. SECR does not require Scope 3, but many companies report selected categories voluntarily as a bridge towards UK SRS. Our Scope 3 reporting guide covers that ground.

Applying the DESNZ conversion factors

The conversion factors are the heart of the calculation. DESNZ publishes a fresh set of UK government greenhouse gas conversion factors each year, in condensed and full versions, covering fuels, electricity, heat and steam, transport and a range of Scope 3 categories^[1].

The single most common error is using the wrong year. Apply the factors that correspond to the reporting period, not the year in which the report is drafted. A financial year ending in 2025 should generally use the 2025 factors, even if the annual report is signed off in 2026^[1].

The UK grid electricity factor already includes the emissions associated with generation. The transmission and distribution losses are published as a separate Scope 3 factor and should not be double-counted into the Scope 2 figure^[1]. Our UK emissions factors reference keeps the published sources together.

Location-based versus market-based electricity

For purchased electricity, the GHG Protocol Scope 2 Guidance sets out two methods. The location-based method uses the average emissions intensity of the grid where consumption occurs — for UK consumption, the DESNZ UK grid factor^[5].

The market-based method reflects the emissions of the electricity the organisation has chosen to buy through contractual instruments — for example a green tariff backed by Renewable Energy Guarantees of Origin (REGOs)^[5].

Where a company uses contractual instruments, the Scope 2 Guidance asks it to disclose both a location-based and a market-based figure, so that readers can see the effect of procurement choices separately from the underlying consumption^[5]. A company with no specific contracts reports only the location-based number.

Choosing an intensity ratio

SECR requires at least one intensity ratio — emissions expressed against a quantifiable factor associated with the organisation’s activities^[2]. Common denominators are turnover (tonnes of CO2 equivalent per million pounds of revenue), headcount (per full-time-equivalent employee), or a unit of output such as floor area or product volume.

The point of the ratio is comparability over time, so the denominator should stay stable year on year.

A ratio that changes basis every reporting period tells the reader nothing about the underlying trend.

SECR also requires a narrative on the energy efficiency action taken during the period — measures implemented, not merely intentions^[2].

Partial-year acquisitions and overseas operations

Partial-year acquisitions and disposals. Because SECR follows the financial-statements boundary, an entity that joins the group mid-year is included only from the date control or equity interest begins; energy and emissions before that date sit outside the report. The mirror applies to disposals. Where an acquisition is material, explain its effect on the year-on-year figures in the narrative so the trend is not misread.

Overseas operations. SECR requires the energy and emissions figures, and the prior-year comparatives, but the detailed energy-use disclosures focus on UK and offshore-area activity; companies commonly present a clear UK-versus-overseas split^[2]. For electricity consumed abroad, a location-based calculation uses the grid factor for the relevant country rather than the UK factor — international electricity factors are published alongside the DESNZ set^[1].

For fuel combustion, the DESNZ fuel factors are generally applied consistently across locations, because the emissions from burning a litre of a given fuel do not vary materially by country^[1].

Data quality, estimates and the practicality limit

Real data is rarely complete. SECR recognises this: the regulations require the information only to the extent that it is practical for the company to obtain it, and where information is omitted on that basis the report must state what has been left out and the steps being taken to obtain it in future^[2].

There is also a seriously-prejudicial exemption: directors may withhold a disclosure they judge would be seriously prejudicial to the organisation’s interests, but the report must say that they have done so^[2].

Where a genuine gap remains, a documented estimate is acceptable — pro-rating from available months, using prior-period data adjusted for activity, or an engineering calculation — provided the basis is recorded. State the methodology, the data sources, and the year of DESNZ factors used^[1].

Verification and the route to UK SRS

SECR does not require third-party assurance.

Many companies nonetheless seek limited assurance over their figures to strengthen credibility, particularly where emissions are material to stakeholders or where the organisation is preparing for mandatory reporting under the UK Sustainability Reporting Standards.

A disciplined SECR process — clear boundaries, documented factor choices, an evidenced estimation methodology — is exactly the foundation that UK SRS S2 will demand of in-scope companies. For how the two regimes relate, see our full SECR guide and the UK carbon reporting overview.

SECR calculation: frequently asked questions