JANUARY 2020 OPINION
Beyond compliance
How manufacturers can make the most of the SECR opportunity
ahead of the reporting deadline
BY EMMA HIRD, CLIENT OPTIMISATION MANAGER, INSPIRED ENERGY
The countdown is now on for the
first reporting deadline for the
mandatory Streamlined Energy
and Carbon Reporting (SECR)
scheme, and some manufacturers will
already be over six months into their first
SECR reporting period.
Against a backdrop of Net Zero and
increasing climate activism, reducing
carbon emissions and energy efficiency
should now firmly be on the boardroom
agenda. SECR, which is designed to replace
the reporting elements of the Carbon
Reduction Commitment Scheme (CRC) and
make energy reporting a simpler process,
also allows shareholders and investors to
hold companies to account if they are not
doing enough to reduce emissions.
However, although mandatory, we are
hearing from some of our clients – many
of whom are manufacturers – that they are
struggling to get buy-in from the top when
it comes to SECR compliance.
What we have seen with previous
schemes is that they can be often seen as
an additional administrative burden when
time and cost pressures on manufacturers
are already high. And, while the SECR box
will be ticked, there isn’t much appetite –
or available resource – to do much more
than that.
Firstly, it may be worth recapping who
qualifies for SECR. It requires quoted
companies, large unquoted companies and
large limited liability partnerships (LLPs)
to disclose carbon emissions and energy
use from electricity, gas and transport as
a minimum as part of their annual filing
obligations. This currently accounts for
around 11,900 businesses – many of which
will be energy-intensive manufacturers.
Now, for a significant proportion of
qualifying manufacturers, managing energy
consumption is not a new phenomenon.
However, there are a considerable number
that will be new to environmental reporting,
and those responsible internally for
managing the SECR reporting process will
be facing pressures to ensure the right time
and resource is dedicated to compliance.
So, what is the business case for going
beyond ‘just’ complying? The manufacturers
that are set to benefit most are those that
seeing SECR as an opportunity to take
control of their energy consumption and
promote their sustainability credentials.
For example, although businesses are
required to include any energy efficiency
projects that they have carried out within
the reporting year, they aren’t actually
required to implement any energy efficiency
measures at all. However, if an organisation
doesn’t implement any efficiency projects,
this will need to be stated in the report.
At a time when customers are
increasingly expecting manufacturers to
be demonstrating a serious commitment
to sustainability, what would be best -
publishing a report that is full of proactive
efficiency projects, or one that shows no
real action to improve sustainability at all?
As the SECR report is in the public
domain, failing to implement any energy
efficiency measures could result in both
financial and reputational damage.
However, reputational impact isn’t
the only benefit of adopting efficiency
projects – improving energy efficiency is
the only guaranteed way to ensure that a
manufacturer isn’t paying more than they
should for their energy. In fact, increasing
energy efficiency through implementing
physical and behavioural projects can
result in an organisation ultimately making
savings on its energy spend. In today’s
volatile energy market, many manufacturers
are seeing significant increases in their
energy bills, so it’s financially prudent to
ensure energy isn’t being wasted.
We are now on countdown to the
first round of SECR reporting. It will be
interesting to see which manufacturers
will have seen SECR as an opportunity to
affect real change in how they approach the
management of their energy consumption.
What is clear is that, as we transition into a
low-carbon world, manufacturers will play
a crucial role in the UK’s net zero future –
and schemes like SECR should be seen as a
means to achieve this, rather than another
box to tick.
Are you prepared for the SECR deadline? Has it had an impact on your energy use?
We want to hear from you. Email: chris.beck@markallengroup.com
www.manufacturingmanagement.co.uk 11
Olivier Le Moal /stock.adobe.com
Failing to implement
any energy efficiency
measures could
result in damage.”
/www.manufacturingmanagement.co.uk
/stock.adobe.com
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