Sustainability and carbon reduction are now central topics in boardrooms across the UK. Businesses are increasingly expected to demonstrate environmental responsibility – not just to meet government targets, but also to satisfy investors, customers and supply chain partners.
With the UK committed to achieving Net Zero by 2050, many companies are asking an important question:
“Are businesses legally required to report their carbon emissions?”
The answer depends largely on the size of the organisation and the regulations that apply to it. While many smaller companies are not currently required to report emissions, larger organisations must comply with specific reporting frameworks.
For businesses across the South East, understanding these requirements is becoming increasingly important – particularly as sustainability reporting begins to influence procurement decisions, financing and long term business strategy.
Are UK Businesses Legally Required to Report Carbon Emissions
In the UK, mandatory carbon reporting primarily applies to large organisations rather than small or medium sized businesses.
The key legislation is the The Companies (Directors’ Report) and Limited Liability Partnerships (Amendment) Regulations 2013, which introduced requirements for certain companies to disclose their carbon emissions and energy consumption in their annual reports.
This regulation was expanded in 2018 through the introduction of Streamlined Energy and Carbon Reporting (SECR), which came into force in 2019. Under the SECR framework, reporting obligations typically apply to large UK companies that meet at least two of the following criteria:
- Annual turnover exceeding £36 million
- 250 or more employees
- £18 million or more in total assets
These organisations must publish information about their energy consumption, carbon emissions and energy efficiency measures as part of their annual reporting.
For many SMEs in the South East, this reporting is not currently mandatory – but the regulatory landscape is evolving as the government pushes towards national decarbonisation targets.
What Information Must Be Disclosed?
Businesses that fall within the SECR framework must report detailed information relating to their energy use and emissions. This typically includes:
Energy Consumption
Companies must report their total annual energy usage, including energy used across buildings, operations and transport.
Carbon Emissions
Organisations must disclose greenhouse gas emissions generated from:
- Direct business activities (such as fuel combustion and company vehicles)
- Indirect emissions from purchased electricity and gas
These emissions are generally reported in tonnes of CO₂ equivalent (tCO₂e).
Emissions Intensity Ratio
Businesses must also include an intensity metric, which allows emissions to be compared relative to company activity. Examples include:
- Emissions per £1 million of revenue
- Emissions per unit of production
- Emissions per employee
This provides a clearer picture of how carbon intensive a business is compared with others in the same sector.
Energy Efficiency Improvements
Companies must also describe actions taken during the reporting year to improve energy efficiency. For many organisations, this includes measures such as installing solar PV and battery storage systems, improving building insulation and upgrading heating and cooling systems. These initiatives not only reduce emissions but can also deliver significant operational cost savings.
Other Sustainability Reporting Frameworks
In addition to SECR, several other frameworks may apply to larger or publicly listed businesses. One of these is the Energy Savings Opportunity Scheme (ESOS), which requires large organisations to conduct energy audits every four years to identify opportunities for improving energy efficiency.
Another framework relates to climate related financial disclosures. The former Task Force on Climate-related Financial Disclosures (TCFD) has now been incorporated into standards developed by the International Financial Reporting Standards Foundation (IFRS). These frameworks focus on how climate risks and environmental impacts may affect a company’s financial performance.
However, these requirements generally apply only to large corporations, listed companies and financial institutions.
Why Smaller Businesses Are Still Choosing to Report Emissions
Even if a company is not legally required to publish carbon data, there are several strong reasons why businesses are increasingly choosing to measure and report their emissions voluntarily.
Strengthening Business Reputation
Transparent sustainability reporting helps demonstrate environmental responsibility to customers, investors and partners. At a time when “greenwashing” is becoming a growing concern, companies that publish clear and measurable sustainability data are often viewed as more trustworthy and credible.
Winning Contracts and Supply Chain Opportunities
Many larger companies – and particularly public sector organisations – now require suppliers to provide carbon reporting or sustainability plans. Businesses that can demonstrate measurable carbon reductions are often better positioned to win contracts.
Preparing for Future Regulations
As the UK moves closer to its 2050 Net Zero target, it is widely expected that reporting requirements will expand to cover more businesses. Companies that begin measuring emissions now will be better prepared for future legislation and will have a clearer roadmap for reducing their environmental impact.
How Businesses Can Reduce Their Carbon Emissions
For many companies, the largest contributor to carbon emissions is energy use within buildings and operations. Installing renewable energy technologies can significantly reduce both energy costs and carbon emissions.
Common solutions include:
- Commercial solar panel installations
- Battery energy storage systems
- Energy efficiency upgrades
- Smart energy management systems
For businesses across the South East, solar PV and battery storage are becoming increasingly popular because they provide both financial savings and measurable carbon reductions – which can support sustainability reporting and Net Zero strategies.
Supporting Your Business on the Road to Net Zero
At Silvercrest Energy, we work with organisations across the South East to help them reduce energy costs and carbon emissions through renewable energy solutions. Our team provides expert guidance on commercial solar PV systems, battery storage and energy strategies that help businesses move towards their sustainability goals while improving long term energy resilience.
If your organisation is looking to reduce emissions, lower electricity costs and prepare for future carbon reporting requirements, our specialists can help design a tailored energy solution.
Speak with the team at Silvercrest Energy today to explore how renewable energy can support your business’s Net Zero journey.
