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Streamlined Energy & Carbon Reporting Consultation

Due to the abolishment of the CRC scheme, the government are proposing to launch a simplified reporting framework which will come into force in April 2019.  The proposed scheme is currently under consultation until January 2018.

Currently, the Energy Savings Opportunity Scheme (ESOS) requires large organisations to report on and audit energy use, however the scheme is limited to the size of the qualifying organisations (employing 250 or more people, or an annual turnover in excess of €50m). The scheme also does not include for public disclosure of energy/carbon consumption.

Due to the limitations of ESOS, it has been found that there is still insufficient awareness, notably at senior management level, of energy costs and cost-saving opportunities that exist across whole businesses.  The government believe that more can be done to bring together and disclose information and overcome the barrier created by lack of information to help businesses think differently, invest in energy efficiency and reduce their energy costs.  The proposed new streamlined energy and carbon reporting will potentially fill this gap.

ESOS will remain in place for qualifying organisations, this will be an additional reporting requirement.

The main proposals for the scheme are as follows:

• Qualifying companies will be required to report on energy consumption and carbon emissions annually and submit with company annual reports. This will then be used to measure energy and carbon intensity metrics for each qualifying company based on staff numbers and/or annual turnover.
• The scheme will only apply to the private sector – the public sector currently has a well-established framework for reporting against greenhouse gas emissions targets, as well as other sustainability indicators.
• It is proposed that this framework will be UK-wide.

The consultation offers four options:

Option 1 – No new reporting policy is implemented.

Option 2 – All companies using over 6GWh of electricity per year are to report on their electricity, gas and transport energy use and emissions, and an intensity metric in their annual reports.

Option 3 – All large companies (more than 250 employees, annual turnover greater than £36m, annual balance sheet total greater than £18m) to report on their electricity, gas and transport energy use and emissions, and an intensity metric in their annual reports.

Option 4 – All large companies (more than 250 employees, annual turnover greater than £36m, annual balance sheet total greater than £18m) to report on their electricity, gas and transport energy use and emissions and an intensity metric in their annual reports, but it additionally requires participants to report on their energy efficiency opportunities and progress against them.

The consulation document favours Option 3 or 4 for implemetation, with an estimation that this will apply to 9,100 UK companies. 

The qualifying companies will be required to include the proposed information within their annual reports, which shareholders can request, and are filed with and made available by Companies House.

If option 4 is implemented then the qualifying organisations will also be required to implement measures to reduce energy and carbon.  It is likely that Option 3 will be implemented initially with Option 4 coming into force after the scheme has been underway for at least a year.

The consultation will close on the 4th January 2018, with a decision on the scheme due in April 2018.

For more information contact enquires@harleyhaddow.com