SECR thresholds: who reports, really
SECR asks three questions about your size and needs two of them answered the wrong way.
The numbers are £36 million of turnover, £18 million of balance sheet total and 250 employees — and the regulation says you must exceed them, where the government’s own guidance says “or more”.
Since 6 April 2025 those figures have also stopped matching the Companies Act test they used to share, which is why a company told it is now “medium-sized” can still owe an energy and carbon report.
The SECR thresholds are a two-of-three test, and every quoted company skips it entirely
Three populations report under SECR, and only one of them is decided by size.
Quoted companies are in scope whatever their size, because Part 7 of Schedule 7 applies on listing status alone and contains no size test at all. SI 2008/410, Sch 7 Part 7
Unquoted companies are in scope if they are large, and large limited liability partnerships are in scope on the same numbers by a separate route through the LLP regulations. SI 2008/1911, reg 12B
The test itself
An unquoted company or LLP is outside SECR for a financial year if it meets at least two of three conditions: turnover not more than £36 million, balance sheet total not more than £18 million, and not more than 250 employees. SI 2008/410, Sch 7 para 20B
Turn that around and it is the sentence most readers actually want about the SECR thresholds: you are in scope if you exceed at least two of the three.
The two-year rule, in one line
The conditions must be met in the year in question and in the preceding financial year, which is the rule that decides when a company enters scope and when it leaves. Sch 7 para 20B(1)
A separate relief takes an organisation out of the detailed disclosures if it consumed 40,000 kWh of energy or less in the UK during the reporting period, which is a far smaller number than it sounds. Sch 7 para 20D(7)
“£36 million or more” is the guidance. The regulation says otherwise.
Almost every account of SECR scope, including two of the government’s own, states the test as “turnover of £36 million or more”.
The regulation is drafted the other way round.
Paragraph 20B does not describe who is in scope; it describes who is exempt, and it lists the qualifying conditions as “not more than” each figure. SI 2008/410, Sch 7 para 20B(2)
What the boundary actually does
A company with turnover of exactly £36 million therefore meets that condition, because £36 million is not more than £36 million.
A company with exactly 250 employees meets that one too.
Read as the guidance writes it, both of those companies are in scope; read as the regulation writes it, both are out on those two conditions and are therefore exempt.
Three official statements of the same threshold
The divergence is not between us and the government — it is inside the government’s own documents.
The review and the evaluation were published by the same department within four months of each other and state the same threshold two different ways. DESNZ, SECR post-implementation review, 26 May 2026 DESNZ, SECR evaluation report, 29 January 2026
Our reading, stated as a reading rather than as law: write the test as exceeding two of the three, and if your figures land on a boundary, take advice rather than a guidance sentence.
One big year does not put you in scope, and one small year does not get you out
The threshold test is not a snapshot.
Paragraph 20B(1) requires the qualifying conditions to be met “in that year and … also … in relation to the preceding financial year” before the exemption applies for a company that has been through a full prior year. Sch 7 para 20B(1)
Why the rule exists
That two-year construction is the same mechanic the Companies Act uses for size classification, and it produces two consequences that catch people in opposite directions. Companies Act 2006, s 465
The practical version, and the part of the SECR reporting threshold that catches people: growth into scope is slow and exit from it is slow, and the year you notice is rarely the year that decided it.
A newly incorporated company is the exception, because it has no preceding financial year to test.
The full SECR requirements set out what the first year in scope actually obliges you to publish, including the point at which prior-year comparatives begin.
Work the SECR reporting threshold against your own numbers
Four questions, and it applies the regulation’s own test rather than the shorthand version of it.
It asks whether you are quoted, then takes your turnover, balance sheet total and headcount, and counts how many of the three you exceed.
It uses more than, because that is how paragraph 20B is drafted, and it tells you which condition decided the answer.
Nothing you enter is sent anywhere, and no figure is inferred — the only numbers it holds are the three in the regulation.
It answers the size question only. A group structure, a low-energy year or an overseas parent can each change the outcome, and each has its own chapter below.
The SECR company size thresholds no longer match the Companies Act
For financial years beginning on or after 6 April 2025, the Companies Act size thresholds rose by roughly half.
A company is now medium-sized for accounts purposes up to £54 million of turnover and £27 million of balance sheet total, against £36 million and £18 million before. SI 2024/1303, regs 9–10
The employee count did not move.
SECR did not move at all.
Why it did not move, precisely
This is usually explained as a saving provision, and that explanation is wrong.
SI 2024/1303 contains one transitional provision, regulation 3, and it deals only with how prior years are re-tested against the new figures. SI 2024/1303, reg 3
SECR was left alone for a simpler reason: it never used the Companies Act size test in the first place.
Parts 7 and 7A of Schedule 7 carry their own threshold table and do not cross-refer to sections 465 to 467, so an amendment to those sections could not reach them. SI 2008/410, Sch 7 Part 7A
Who has said so, and when
The Explanatory Memorandum says so in terms, and says what follows from it: qualifying for SECR “will no longer be aligned with qualifying as an unquoted large company or LLP under the Companies Act 2006”. Explanatory Memorandum to SI 2024/1303
The Financial Reporting Council confirmed the same thing in March 2025, in a document written specifically to answer the question. FRC, Changes to company size thresholds FRC news release, 21 March 2025
Who is actually caught by the gap
The exposure sits with companies whose turnover is between £36 million and £54 million, or whose balance sheet total is between £18 million and £27 million, with 250 or fewer employees.
They are medium-sized for accounts and audit purposes and large for energy and carbon reporting, at the same time, on the same set of statutory accounts.
That is not a drafting accident anybody has disowned — it is the stated consequence in the Explanatory Memorandum — but it is a consequence almost nobody is told about, because the person who tells a company it has become medium-sized is usually its accountant and the subject under discussion is usually audit exemption. Explanatory Memorandum to SI 2024/1303, para 6.7
£36m against £54m and £18m against £27m, both two-thirds; the employee condition is 250 in each and did not move.
What makes it easy to miss
The energy and carbon disclosures live in the directors’ report, which is filed at Companies House and is public. SI 2018/1155
A dropped disclosure is therefore visible to anyone who looks at the filing, including a customer running supplier due diligence.
Neither of the two DESNZ documents published in 2026 mentions the divergence at all.
What the government has not said
We searched both the January 2026 evaluation and the May 2026 post-implementation review for any reference to SI 2024/1303, to the £54 million figure, or to the words “threshold change”, and found none. DESNZ, SECR post-implementation review
That is a statement about those two documents, not a claim that DESNZ is unaware of it.
SECR is one of several UK regimes whose scope tests do not line up; the wider map of UK ESG reporting requirements sets the others alongside it.
Who must report SECR when no threshold applies at all
A quoted company is in scope at any size, and the definition of quoted is narrower than most people assume.
“Quoted company” is defined in section 385 of the Companies Act: a company whose equity share capital has been included in the official list, or is officially listed in an EEA State, or is admitted to dealing on the New York Stock Exchange or Nasdaq. Companies Act 2006, s 385
Two consequences follow, and both catch people.
AIM is not the official list
A company admitted to AIM is not a quoted company for these purposes, because AIM is not the official list.
An AIM company therefore falls into SECR only through the large-unquoted route, on the £36m / £18m / 250 test like any other private company.
Plenty of AIM companies exceed two of those and report anyway; the point is that they report the unquoted disclosure set, which is UK energy rather than global energy.
A small quoted company still reports globally
There is no de minimis for a quoted company other than the 40,000 kWh low-energy route, so a very small listed company reports global Scope 1 and Scope 2 emissions and global energy use. SI 2008/410, Sch 7 Part 7
The six greenhouse gases in question are those named in section 92 of the Climate Change Act 2008. Climate Change Act 2008, s 92
A subsidiary can be exempted, but only into a report that actually exists
Where a parent prepares a group directors’ report that includes the subsidiary’s energy and carbon information, the subsidiary does not have to repeat it in its own.
The exemption is conditional, and the conditions are specific: the subsidiary must be included in a group report for the same financial year, and the parent’s financial year must end at the same time as, or before, the subsidiary’s. SI 2008/410, Sch 7 para 20A
Parent companies are tested on a group basis under paragraph 20C, on aggregate figures of not more than £36 million net or £43.2 million gross of turnover, and not more than £18 million net or £21.6 million gross of balance sheet total. Sch 7 para 20C(2)
Net and gross, and why both appear
The gross figures exist because a group can be tested before or after consolidation adjustments, and the gross column is the one that catches groups with heavy intra-group trading.
SECR is not “one in, all in”
Unlike the schemes it replaced, a group may exclude from its group report the energy and emissions of a subsidiary that would not itself be in scope if it reported alone. GOV.UK, Environmental Reporting Guidelines (March 2019), ch 2
That is a genuine choice rather than an oversight, and it is one of the few places SECR is more permissive than ESOS.
Saying what has been left out
Where a group makes that election, the report should say what has been excluded, because the reader cannot otherwise tell whether a figure covers the group or part of it.
DESNZ’s own 2026 review identifies group reporting boundaries as an area where the current guidance does not give enough clarity. DESNZ, SECR post-implementation review, 26 May 2026
A UK subsidiary of a foreign parent usually cannot use the group exemption
The group exemption works by pointing at a group directors’ report that contains the information.
A company not incorporated in the UK does not prepare a directors’ report under the Companies Act, so for most overseas-parented groups there is nothing for the exemption to point at.
The practical result is that a UK subsidiary which exceeds two of the three thresholds reports in its own right, whatever its parent publishes elsewhere.
A global sustainability report is not a substitute, because the obligation is to include specified content in a document filed under the Companies Act. SI 2018/1155
The size test still counts the whole group
Where the UK entity is itself a parent, the aggregate figures used to test it are the group’s, and a non-UK ultimate parent does not remove the parts of the group that sit above it from that arithmetic.
An intermediate UK parent that does not prepare consolidated accounts is the awkward case, and it is one of the situations the guidance handles least well.
The overseas-parent point is the single most common structural surprise we see raised against SECR, and it is not addressed anywhere in the 2019 guidance, which says only that companies not incorporated in the UK are outside the regime. GOV.UK, Environmental Reporting Guidelines
The SECR exemptions are three, and the best-known one is the narrowest
An organisation that consumed 40,000 kWh of energy or less in the UK during the reporting period may leave out the detailed disclosures.
It must still say in its report that it has done so and why, so the low-energy route is a statement rather than a silence. SI 2008/410, Sch 7 para 20D(7)(a)
40,000 kWh is roughly the annual electricity of ten average UK households.
For a company already exceeding two of £36 million turnover, £18 million of assets and 250 employees, that ceiling is almost unreachable unless the entity is a holding company with no operations of its own.
Which is, in practice, who uses it.
Quoted companies measure it globally
For a quoted company the test looks at global energy use, with no UK qualifier at all, and for an unquoted company or LLP it looks at UK energy use only — the 40,000 kWh test’s territorial limb does not extend to the offshore area, which belongs to a separate, permissive provision about what an unquoted company may choose to exclude from its reporting. SI 2008/410, Sch 7 paras 15(5) and 20D(7)
Where a group reports at group level, the assessment is made against the group’s consumption rather than each entity’s, which is why a low-energy holding company inside an energy-intensive group cannot use the route.
Seriously prejudicial, and not practical to obtain
The second of the three SECR exemptions allows information to be withheld where, in the directors’ opinion, disclosure would be seriously prejudicial to the interests of the company.
The report must state that the information is not disclosed and that this is the reason. SI 2008/410, Sch 7 para 20D(7)(b)
It is a high bar and it is rarely invoked, because the disclosures are energy volumes and emissions totals rather than anything commercially granular.
The third is a disclosure, not a relief
The third is not really an exemption at all.
The requirements apply only to the extent that it is practical for the company to obtain the information, and where it is not, the report must state what is missing and why. Sch 7 para 20D(6)
The statutory word is “practical”, not “practicable”, and much commentary — including DESNZ’s own 2026 review — paraphrases it as the latter.
The relationship between ESOS and SECR is the other place this comes up, because organisations often assume an ESOS audit discharges a SECR obligation and it does not.
An LLP reports on the same numbers, through a different document
Large LLPs are in scope on exactly the same £36m / £18m / 250 test, reached by a different statutory route.
Regulation 12B of the LLP Accounts Regulations applies a modified section 415A of the Companies Act to LLPs and substitutes its own threshold table for paragraphs 20B and 20C. SI 2008/1911, reg 12B
The numbers are identical, including the group figures of £36 million net or £43.2 million gross and £18 million net or £21.6 million gross.
Three differences that matter operationally
An LLP publishes an Energy and Carbon Report, not a directors’ report, and it is a distinct document with its own approval route.
It is approved by the members and signed on their behalf by a designated member.
No strategic report to promote into
An LLP has no strategic report, so the option some companies use — promoting the energy and carbon content into the strategic report and leaving a cross-reference in the directors’ report — is not available to it.
Groups of LLPs
Parent LLPs that prepare group accounts prepare a consolidated Energy and Carbon Report on the same basis as a parent company.
None of this changes the content: the disclosures are the same as for a large unquoted company.
Charitable companies use gross income, and public bodies are outside
A charitable company applies the same two-of-three test with gross income substituted for turnover.
Where it is in scope, the energy and carbon content sits inside the combined directors’ and trustees’ annual report rather than in a separate document. GOV.UK, Environmental Reporting Guidelines (March 2019), ch 2
An unincorporated charity is not a company and is therefore outside SECR entirely, whatever its size.
Academy trusts have their own guidance
Academy trusts are charitable companies and are in scope on the same test, and the Department for Education maintains separate guidance for them that most SECR pages never mention. DfE, SECR for academy trusts
The public sector is outside
Public bodies are not caught, because SECR applies to companies and LLPs registered under the Companies Acts rather than to the public sector, which reports through its own routes.
NHS bodies, universities and local authorities therefore sit outside SECR unless they operate a trading subsidiary that meets the test in its own right.
Qualifying for ESOS tells you nothing about qualifying for SECR
The two regimes are routinely described together and their scope tests are not merely different numbers — they are different logic.
ESOS qualifies a “large undertaking” that employs at least 250 persons, or that has an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million. ESOS Regulations 2014, Schedule 1
SECR tests three conditions and asks whether you exceed any two of them.
The difference is not cosmetic.
Two organisations, opposite answers
A company with 300 employees and modest finances is an ESOS large undertaking on the headcount limb alone, and may be outside SECR because it exceeds only one of the three SECR conditions.
A company with £40 million of turnover, £20 million of assets and 90 employees is the reverse: in SECR on two conditions, and outside ESOS because its financial limb requires both figures to be met at once.
Two more reasons they do not track each other
ESOS runs on a four-year compliance phase with its own qualification date, where SECR runs annually on the financial year. GOV.UK, ESOS guidance
ESOS is regulated by the Environment Agency and its equivalents; SECR sits in a filed directors’ report and is picked up, if at all, through company reporting review.
The consequence worth acting on: an ESOS determination is not evidence of SECR scope in either direction, and neither is the absence of one.
The ESOS and SECR hub runs both regimes side by side, and ESOS Phase 4 covers the current phase’s own dates.
The threshold is tested on the financial year, and so is everything else
SECR attaches to a financial year, not to a calendar year and not to an energy supplier’s billing year.
The disclosures belong in the directors’ report for the year in question, which means the reporting period is the accounting period. SI 2018/1155
Organisations are allowed to use a non-coterminous energy year where the accounting data is not available on the same basis, provided the report makes clear what period the energy figures cover. GOV.UK, Environmental Reporting Guidelines (March 2019), ch 2
Where the two periods diverge
That permission is where most of the practical difficulty sits, because the moment the two periods differ, the intensity ratio has an emissions numerator from one period and a turnover denominator from another.
Three situations the guidance does not work through
A changed accounting reference date produces a stub period, and a stub period is still a financial year for these purposes even if it is four months long.
An acquisition part-way through the year brings energy in from the date of control, and the size test for the following year is run on the enlarged figures.
A disposal does the reverse, and it is the most common reason a company crosses back under the thresholds — which, on the two-year rule, still takes two years to take effect.
One year end can break a group exemption
Where the subsidiary exemption is used, the parent’s financial year has to end at the same time as, or before, the subsidiary’s, so a group that changes one company’s year end can break its own exemption without noticing. SI 2008/410, Sch 7 para 20A
Nothing here has to be audited, and something here gets read by the auditor anyway
SECR disclosures do not require external verification or assurance.
The 2019 guidance recommends it and does not require it, and no provision in Schedule 7 imposes it. GOV.UK, Environmental Reporting Guidelines
The auditor is not silent, though.
What the auditor does read
Under ISA (UK) 720 the auditor reads the other information in the annual report and considers whether it is materially inconsistent with the financial statements or with their knowledge of the entity.
An intensity ratio built on a turnover figure that does not match the accounts is exactly the kind of inconsistency that duty is designed to surface.
Where organisations do buy assurance
Voluntary assurance is usually taken under ISAE 3000 or the greenhouse-gas-specific ISAE 3410, at limited rather than reasonable level.
Limited assurance is materially cheaper and is what most first-time buyers get; reasonable assurance is rare outside quoted companies with an existing climate reporting programme.
Why organisations buy it anyway
The practical reason to buy it is rarely SECR itself — it is that the same emissions data is going into a customer questionnaire, a CDP response or a UK SRS-aligned disclosure where assurance expectations are higher.
The 2026 review does not recommend making assurance mandatory, and no consultation proposing it has opened. DESNZ, SECR post-implementation review, 26 May 2026
Crossing the threshold has a measured price, and the government under-estimated it three times over
Until 2026 there was no reliable public figure for what SECR compliance actually costs.
DESNZ’s evaluation and post-implementation review changed that, and the numbers are uncomfortable for anyone who described SECR as a light-touch reporting duty.
Complying takes on average 94 hours of internal staff time a year, equating to about £2,500. DESNZ, SECR post-implementation review, 26 May 2026
56% of compliers also incur external costs, and once those are added the total ongoing mean cost is £7,100 a year.
The 2018 impact assessment predicted about £2,300, so the outturn is roughly three times the estimate in 2025 prices.
Two honest caveats travel with those size bands, and the review states both.
The sample was small and the variance high, so DESNZ records that no statistically significant differences were observed by size of business or by whether the business was quoted.
They are the best public figures that exist, and they are indicative rather than a benchmark.
What crossing the threshold actually makes you publish
The threshold decides two things at once: whether you report, and which of the two disclosure sets you report.
A quoted company discloses global Scope 1 and Scope 2 greenhouse gas emissions, global energy use in kWh, at least one intensity ratio, the methodology used and a narrative of the energy-efficiency action taken in the year. SI 2008/410, Sch 7 Part 7
A large unquoted company or LLP discloses UK and offshore energy use across electricity, gas and transport fuel — the electricity and gas emissions are Scope 1 and Scope 2, and the transport-fuel figure is a narrow, mandatory Scope 3 category — an intensity ratio, the methodology and the same efficiency narrative. SI 2008/410, Sch 7 Part 7A
The comparative year
After the first reporting year, prior-year comparatives are required.
The Scope 3 point everyone gets backwards
Scope 3 is voluntary under SECR with one exception, and the exception runs the opposite way to what most summaries imply.
An unquoted reporter must include transport fuel purchased for business travel in vehicles it owns or leases, which is a Scope 3 item under the GHG Protocol for grey-fleet and rental use.
Everything else — supply chain, purchased goods, use of sold products — is voluntary. GOV.UK, Environmental Reporting Guidelines (March 2019)
Where the conversion factors come in
That is one of the clearest gaps between SECR and what UK SRS S2 contemplates, and it is the reason a company can be fully SECR-compliant and nowhere near ready for a climate standard. DBT, UK SRS S1 and S2
Emissions are calculated against the government’s conversion factors for company reporting, which are reissued annually. DESNZ, conversion factors for company reporting
Nobody is checking, and the filing is public anyway
SECR has no dedicated penalty regime of its own.
Enforcement runs through the ordinary directors’-report machinery: the FRC’s review of company reports, the court’s power under section 456 to order a revised report, and directors’ duties around the report’s approval. Companies Act 2006, s 456
The penalties commonly quoted on SECR pages — the £150 to £7,500 scale — are the Companies House penalties for filing accounts late, which is a different failure from filing accounts with a deficient energy and carbon disclosure. Companies Act 2006, s 453
What the compliance data actually shows
Treat any page that presents that table as a SECR sanction with caution.
What the compliance data actually shows
DESNZ’s evaluation read annual reports at scale and detected 67% of expected reporters disclosing both Scope 1 and at least one Scope 2 figure. DESNZ, SECR evaluation report, 29 January 2026
That split into 85% for quoted companies and 66% for unquoted companies and LLPs, which is the gap you would expect between a population under FRC oversight and one that is not.
Its business survey found 77% of in-scope businesses aware of the regulations and complying.
Of the remainder, 14% were eligible and did not compile or report the data at all, and 9% compiled and reported energy and carbon data without having heard of SECR.
The review describes the regime’s enforcement as light-touch and notes that it works better for quoted companies than for private companies and LLPs. DESNZ, SECR post-implementation review
Is SECR 2026 the last version of it?
The statutory review of SECR was published on 26 May 2026, about two years later than the five-year deadline written into the 2018 regulations.
Its recommendation is to retain SECR with amendments, and the department’s formal recommendation to the Regulatory Policy Committee was recorded as “Amend”. DESNZ, SECR post-implementation review, 26 May 2026
The RPC rated the review green — fit for purpose — on 15 May 2026. RPC opinion, RPC-DESNZ-26154-PIR(1)
What the review actually recommends
The named directions of travel are alignment with ISSB and TCFD-aligned frameworks to reduce duplication, a standardised disclosure template, and updated guidance on eligibility thresholds, site inclusion and group reporting boundaries.
The review is explicit that these “do not represent final decisions” and that any changes “will be subject to consultation”, through a planned 2026 consultation on streamlining energy and emissions reporting.
The directors’ report is going, and SECR is not going with it
A written ministerial statement of 21 October 2025 committed to removing the requirement for any company to produce a directors’ report. Written Ministerial Statement HCWS973, 21 October 2025
The same statement says that useful requirements, “including reporting on energy and emissions, will be retained and moved elsewhere in the Annual Report”.
So the container is under review; the obligation is not.
Where UK SRS actually stands
UK SRS S1 and S2 were published by DBT on 25 February 2026 for voluntary use. DBT, UK SRS S1 and UK SRS S2
The FCA consulted in CP26/5 on requiring UK SRS S2 of listed issuers for accounting periods beginning on or after 1 January 2027, and expects to publish a policy statement in autumn 2026. FCA CP26/5, 30 January 2026
Those proposals reach around 600 listed companies: 515 of them — listed in the commercial companies, non-equity/non-voting equity shares or transition categories — would be required to comply with the UK SRS proposals, while the remaining 89, listed only in the secondary listing or depositary receipts categories, would instead disclose whatever climate or sustainability standards apply where they are primarily listed or incorporated. Even the fuller 600 is a small fraction of SECR’s roughly 19,900 in-scope entities.
The honest position today
Anyone telling you SECR is being phased out is describing an intention nobody has legislated.
The UK SRS intelligence hub tracks the standards that may eventually absorb SECR’s function, and the honest position today is that no such decision exists.
Becoming medium-sized for your accounts does not take you out of SECR, because SECR never used that test.
The numbers worth writing down
Test your last two years against the SECR numbers, not against the size classification on your accounts.
Check whether SECR applies to you See the full SECR requirements →The scope test, precisely
SECR — Streamlined Energy and Carbon Reporting — was created by the 2018 Regulations, which set the SECR thresholds still in force, and applies to financial years beginning on or after 1 April 2019. SI 2018/1155
Three populations answer the question of who must report SECR.
Quoted companies, of any size, must report global emissions.
Unquoted companies and LLPs
Unquoted companies and LLPs must report if they are large, which the regulation defines by reference to three conditions in the reporting year and the preceding one: turnover, balance sheet total and employee numbers, tested at £36 million, £18 million and 250. SI 2008/410, Sch 7 paras 20B–20C Companies Act 2006, s 465
The exemptions are narrow.
The reliefs
An organisation consuming 40,000 kWh or less of UK energy in the period is a low energy user — it must say so in its report, but escapes the detailed disclosures. Sch 7 para 20D(7)(a) GOV.UK, Environmental Reporting Guidelines
Information may be omitted where it is not practical to obtain, or — rarely invoked — where disclosure would be seriously prejudicial to the organisation’s interests. Sch 7 paras 20D(6) and 20D(7)(b)
April 2025: the size uplift that did not move SECR
For financial years beginning on or after 6 April 2025, the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 raised the general Companies Act size thresholds by roughly 50%: a company is now large for accounts purposes only above £54 million turnover and £27 million balance sheet total. SI 2024/1303
Large numbers of companies moved down a size category, shedding reporting and audit obligations accordingly.
SECR did not follow.
Why SECR was unaffected
The 2024 Regulations did not amend Parts 7 and 7A of Schedule 7, which carry SECR’s own threshold table — so companies and LLPs that are now medium-sized for accounts purposes, but were large under the old test, remain within SECR. Explanatory Memorandum to SI 2024/1303, para 6.7
The FRC’s threshold-change summary makes the point explicitly, yet it is routinely missed: a company told by its accountant that it has become medium-sized will naturally assume its energy and carbon disclosures lapsed too. FRC, Changes to company size thresholds FRC library
They did not.
Who is exposed
The practical risk sits with companies in the band between the old and new thresholds — turnover £36–54 million or balance sheet £18–27 million, with 250 or fewer employees.
They are medium-sized for accounts, large for SECR, and disproportionately likely to drop the disclosure by accident.
And it is visible
Directors’ reports are filed publicly; the omission is checkable.
What in-scope organisations actually publish
Disclosure tiers differ by population.
Quoted companies report global Scope 1 and 2 greenhouse gas emissions, underlying global energy use, at least one intensity ratio, and a narrative of energy-efficiency action taken in the year. SI 2008/410, Sch 7 Part 7
Large unquoted companies and LLPs report UK (and offshore-area) energy use across electricity, gas and transport fuel — the electricity and gas emissions are Scope 1 and 2, and the transport-fuel figure is a narrow, mandatory Scope 3 category — an intensity ratio, the methodology used, and efficiency actions. SI 2008/410, Sch 7 Part 7A
The comparative year
After the first reporting year, prior-year comparatives are required.
Scope 3
For large unquoted companies and LLPs, Scope 3 remains voluntary under SECR apart from transport fuel bought for business travel in owned or leased vehicles; quoted companies carry no Scope 3 limb, mandatory or voluntary, at all — one of the clearest gaps between SECR and what UK SRS S2 contemplates. DBT, UK SRS S1 and S2
The 2026 post-implementation review
DESNZ’s 2026 post-implementation review of the SECR regulations examined whether the regime has delivered transparency and board-level accountability, drawing on an independent evaluation published in January 2026. DESNZ, 2026 post-implementation review of the SECR Regulations 2018
Its finding is that SECR “has mainly met its objectives and has delivered measurable benefits”, with a benefit-cost ratio of 2.72 and a net present social value of £5.1bn over 2019–2025.
The measured energy saving averaged 8 TWh a year between 2020 and 2025, equating to about 1.7 MtCO2e a year.
What it measured
The synthetic difference-in-differences analysis found reductions of around 4.5% in 2020 and 6.2% in 2021, with a 2022 estimate of 4.9% that was not statistically significant — which the review reads as SECR’s influence lessening over time.
79% of complying businesses said they had disclosed data they would not otherwise have published.
What it cost
Compliance costs came in materially above the 2018 impact assessment’s prediction, at £270m in year one and £140m a year afterwards against £42m and £26m predicted, partly because 76% more companies and LLPs were in scope than expected — 19,900 against 11,300.
The review situates SECR within a reporting landscape that has changed fundamentally since 2018 — TCFD-aligned rules, and now UK SRS. DBT, UK SRS
SECR sits within the broader constellation of ESG reporting requirements in the UK, including ESOS, TCFD rules, and emerging UK SRS obligations.
Key facts, with their sources
More SECR coverage on SRS Report
SECR requirements
The full disclosure checklist for in-scope organisations.
Both regimesESOS & SECR intelligence hub
Both energy and carbon compliance regimes, tracked as one system.
What’s nextUK SRS intelligence hub
The standards that may eventually absorb SECR’s function.
The regimeStreamlined Energy and Carbon Reporting
What SECR is, where it came from and how a report is built.
FormatSECR reporting template
The disclosure layout, line by line, with the required headings.
EmissionsSECR carbon reporting
Conversion factors, intensity ratios and the methodology statement.
AdjacentESOS Phase 4
A different qualification test, a different regulator and a 2027 deadline.
UK contextESG reporting requirements in the UK
Which UK regimes are mandatory, and where SECR sits alongside them.
OverviewUK carbon reporting requirements
Every mandatory carbon disclosure a UK organisation can be caught by.
SECR thresholds — frequently asked questions
What are the SECR reporting thresholds?
Quoted companies of any size are in scope.
Unquoted companies and LLPs are in scope if they are large, which the regulation expresses as an exemption for organisations meeting at least two of three conditions: turnover not more than £36 million, balance sheet total not more than £18 million, and not more than 250 employees.
In plain terms, you are in scope if you exceed at least two of the three, in the financial year and in the one before it.
These figures come from the 2018 SECR regulations and were untouched when the general Companies Act size thresholds rose in April 2025. SI 2008/410, Sch 7 para 20B
Did the 2025 company size threshold changes affect SECR?
No — and this is widely misunderstood.
The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 raised the general size thresholds by about 50% (large became more than £54m turnover / £27m balance sheet) for financial years beginning on or after 6 April 2025.
SECR was unaffected, not because of a saving provision but because Parts 7 and 7A of Schedule 7 carry their own threshold table and do not cross-refer to the Companies Act size sections.
The Explanatory Memorandum states the consequence directly: qualifying for SECR “will no longer be aligned with qualifying as an unquoted large company or LLP under the Companies Act 2006”. Explanatory Memorandum to SI 2024/1303
A company reclassified from large to medium-sized for accounts purposes can therefore still owe SECR disclosures.
Is there a low-energy exemption from SECR?
Yes.
Organisations that consumed 40,000 kWh or less in the UK during the reporting period qualify as low energy users — they must state this in their report but are exempt from the detailed disclosures.
There is also a limited exemption where disclosure would be seriously prejudicial, and for energy and emissions where obtaining the information is not practical.
40,000 kWh is about the annual electricity of ten households, so for anything above a dormant or holding entity the relief is rarely available. SI 2008/410, Sch 7 para 20D
What must be disclosed under SECR?
Quoted companies disclose global Scope 1 and 2 emissions, an intensity ratio, underlying global energy use and energy-efficiency action taken.
Large unquoted companies and LLPs disclose UK (and offshore) energy use, associated Scope 1 and 2 emissions for electricity and gas, plus a narrow, mandatory transport-fuel Scope 3 figure, an intensity ratio, methodology and efficiency actions.
Prior-year comparatives are required after the first year. SI 2008/410, Sch 7 Parts 7 and 7A
Will SECR be replaced by UK SRS?
Not yet, and not automatically.
UK SRS S2 covers similar metrics with broader climate disclosure, and the government completed a post-implementation review of SECR in 2026 examining its performance and its place in a changing landscape.
That review recommends retaining SECR with amendments and says explicitly that its themes “do not represent final decisions” and that any changes will be subject to consultation. DESNZ, SECR post-implementation review, 26 May 2026
Rationalisation is a live policy question, but until legislation changes, SECR obligations continue in parallel.
Treat vendor claims that SECR is being phased out with caution.
Does SECR apply to a UK subsidiary of an overseas parent?
Usually yes, in its own right.
The subsidiary exemption works by pointing at a group directors’ report that contains the energy and carbon information, and a parent incorporated outside the UK does not prepare one.
So a UK subsidiary that exceeds two of the three thresholds reports for itself, whatever its parent publishes internationally. SI 2008/410, Sch 7 para 20A
Is an AIM-listed company a quoted company for SECR?
No.
“Quoted company” is defined by section 385 of the Companies Act 2006 as one whose equity share capital is on the official list, officially listed in an EEA State, or admitted to dealing on the New York Stock Exchange or Nasdaq.
AIM is not the official list, so an AIM company is tested on the £36m / £18m / 250 route and, if in scope, files the unquoted disclosure set covering UK energy rather than global energy. Companies Act 2006, s 385
How much does SECR compliance cost?
DESNZ measured it for the first time in 2026.
The mean ongoing cost is £7,100 a year, made up of about 94 hours of internal staff time worth roughly £2,500, plus external costs incurred by 56% of compliers.
Reported figures were higher for quoted companies (£8,700) than unquoted (£6,600) and higher for organisations with 1,000 or more employees (£12,200) than those under 300 (£4,700), though the review records that no statistically significant differences were observed by size or by quoted status. DESNZ, SECR post-implementation review
Do I leave SECR scope the year my turnover drops below £36 million?
Not on its own.
The qualifying conditions have to be met in the financial year and in the preceding financial year before the exemption applies again.
One year back under the thresholds therefore does not restore the exemption, in the same way that one year above them does not remove it. SI 2008/410, Sch 7 para 20B(1)
Are LLPs in scope of SECR?
Large LLPs are, on the same £36m / £18m / 250 test.
They reach it through regulation 12B of the LLP Accounts Regulations rather than through Schedule 7 directly, and they publish an Energy and Carbon Report approved by the members and signed by a designated member.
An LLP has no strategic report, so the option of promoting the content into the strategic report is not open to it. SI 2008/1911, reg 12B
The threshold vocabulary, in plain English
- Qualifying conditions
- The three size conditions in paragraph 20B — the SECR thresholds themselves. Meeting two or more of them exempts you; exceeding two or more puts you in scope.
- Balance sheet total
- The aggregate of the amounts shown as assets in the balance sheet, before deducting liabilities — not net assets.
- Quoted company
- Defined by section 385 of the Companies Act 2006. The official list, an EEA official listing, the New York Stock Exchange or Nasdaq. Not AIM.
- Net and gross group figures
- Net figures are after consolidation adjustments; gross figures are before them. A group may be tested on either, at the higher gross thresholds.
- Low energy user
- An organisation consuming 40,000 kWh or less in the period. It must state that it is one; it does not simply omit the section.
- Energy and Carbon Report
- The LLP equivalent of the energy and carbon content of a directors’ report, approved by the members and signed by a designated member.
- Intensity ratio
- At least one ratio expressing emissions against a unit of activity — per £m turnover, per unit produced, per full-time equivalent.
- Post-implementation review
- The statutory look-back required by the 2018 regulations. Published 26 May 2026, recommending retention with amendments.
Primary sources
Every one of the SECR thresholds on this page, and every figure beside them, is linked to the document it comes from.
Where the legislation and the government’s own guidance state the same threshold differently, both statements are cited rather than reconciled silently.
- legislation.gov.uk — The Companies (Directors’ Report) and LLPs (Energy and Carbon Report) Regulations 2018 (SI 2018/1155). The SECR regulations. They insert Parts 7A and amend Part 7 of Schedule 7 to SI 2008/410, and they apply to financial years beginning on or after 1 April 2019.
- legislation.gov.uk — SI 2008/410, Schedule 7 Part 7A. The operative text for unquoted companies: paragraph 20A on application and the subsidiary exemption, 20B and 20C on the qualifying conditions, and 20D on the disclosures and the three reliefs.
- legislation.gov.uk — SI 2008/410, Schedule 7 Part 7. The quoted-company requirements, which apply on listing status with no size test.
- legislation.gov.uk — SI 2008/1911, regulation 12B. How LLPs reach the same thresholds by a separate route, and the Energy and Carbon Report’s approval and signature rules.
- Companies Act 2006, sections 465–466 (companies qualifying as medium-sized / large). The general size classification, and the drafting convention — “not more than” — that SECR’s own table follows.
- Companies Act 2006, section 385. The definition of a quoted company, which is why AIM admission does not make one.
- legislation.gov.uk — The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024. Raised size thresholds around 50% for financial years beginning on or after 6 April 2025.
- Explanatory Memorandum to SI 2024/1303 (PDF). Paragraph 6.7: the Regulations do not affect the SECR requirements, and qualifying for SECR “will no longer be aligned” with qualifying as a large company or LLP.
- Financial Reporting Council — Changes to company size thresholds (PDF). Confirms SECR continues on the pre-uplift thresholds and points readers to Parts 7 and 7A of Schedule 7.
- Financial Reporting Council — news release, 21 March 2025. Dates that summary and records the reissued scoping tables covering the energy and carbon report.
- Financial Reporting Council — publications library. Where the threshold-change summary and the scoping tables are held.
- 2026 post-implementation review of the SECR Regulations 2018 (PDF, DESNZ). Published 26 May 2026. The cost and benefit figures, the compliance evidence, and the recommendation to retain with amendments.
- DESNZ — SECR Regulations evaluation. Published 29 January 2026. The independent evaluation underlying the review, including the quoted and unquoted compliance split.
- Regulatory Policy Committee — opinion on the SECR post-implementation review. Green-rated 15 May 2026, reference RPC-DESNZ-26154-PIR(1).
- Environmental Reporting Guidelines: including SECR guidance (GOV.UK). The 152-page guidance. Last updated 29 March 2019, and the 2026 review recommends it be updated.
- Department for Education — SECR for academy trusts. The only recently maintained GOV.UK HTML explainer of SECR, written for charitable companies.
- Written Ministerial Statement HCWS973, 21 October 2025. The commitment to remove the directors’ report while retaining energy and emissions reporting elsewhere in the annual report.
- UK Sustainability Reporting Standards (UK SRS S1 and S2) (DBT, GOV.UK). Published 25 February 2026 for voluntary use.
- FCA — CP26/5, aligning listed issuers’ sustainability disclosures with international standards. Published 30 January 2026; around 600 listed companies affected and 515 required to comply; policy statement expected autumn 2026.
- Climate Change Act 2008, section 92. The six greenhouse gases a SECR disclosure covers.
- GOV.UK — government conversion factors for company reporting. The factor set a SECR calculation is built on, reissued annually.
- GOV.UK — Energy Savings Opportunity Scheme (ESOS). A separate regime with a different qualification test, which is why ESOS status says nothing about SECR scope.
Verified 6 August 2026, and current for SECR 2026 reporting. Where a threshold matters at the boundary, read the statutory instrument rather than a summary of it, and take advice on your own figures.
Settle the scope question, then read what it obliges
The scope check takes about twenty seconds and sends nothing anywhere; the requirements page covers everything the threshold assumes you already know.