Businesses that report their energy use and carbon emissions in line with new government requirements will help them reduce operating costs and fight climate change, the Energy Minister Kwasi Kwarteng has said. 

Around 12,000 large or listed UK businesses must start submitting new data on their energy use and emissions alongside their annual reports for the first time this year. They must also explain the measures they are taking to reduce their energy consumption in a drive to reduce carbon emissions from commercial buildings.

Buildings, including business premises, account for 30% of greenhouse gas emissions. Ministers have therefore set out an ambition to reduce business energy use by 20% by 2030. Reaching that target would help companies save an estimated £6 billion a year, while taking 22 million tonnes of CO2 emissions out of the atmosphere - equivalent to the annual emissions of 4.6 million cars. 

Energy and Clean Growth Minister Kwasi Kwarteng said:

"Evidence shows that reporting energy use saves businesses on their bills, can boost productivity and attract increasingly green-minded customers by showing they're committed to fighting climate change.

"These latest requirements are coming into force in this year of climate action and will help take businesses' energy savings to the next level, cutting emissions and boosting bottom lines as we work towards net zero by 2050."

Businesses whose financial years started on or after 1 April 2019 will need to comply with the Streamlined Energy & Carbon Reporting requirements (SECR). It also provides a tool for firms to track energy usage, measure energy efficiency and cut their carbon footprint.

Businesses must also explain the measures they are taking to reduce their energy consumption, in a drive to reduce carbon emissions from commercial buildings and other energy uses.

It helps companies identify the quickest and easiest steps they can take to help reduce consumption in buildings, industrial processes and transport. Firms can also include information on their supply chain's energy use and emissions.

As well as the new SECR, businesses are required to confirm they have carried out a full energy audit known as the Energy Savings Opportunity Scheme (ESOS) at least every four years. The  ESOS audits in 2015 showed collective energy savings from businesses were enough to help power 180,000 homes for a year. The last ESOS audits were submitted in December and are expected to achieve further reductions in CO2 emissions.

Ministers hope the new SECR requirements will push carbon and energy savings even further.

The Government has invested over £1 billion of funding through a range of focused schemes to help businesses reduce energy use and emissions. It has also published its Green Finance Strategy, promoting green and sustainable growth in the financial services sector.

Key facts

●      The new framework applies to all quoted companies, large UK incorporated unquoted companies and large Limited Liability Partnerships with at least two of the following: 250 employees, annual turnover greater than £36m, or annual balance sheet total greater than £18m.

●      Companies that fail to comply with the new SECR requirements may have to resubmit their annual company accounts to Companies House or pay fines if missing filing deadlines. Failure to file a Confirmation Statement or accounts is a criminal offence which can result in directors being fined personally in the criminal courts. The SECR builds on the previous Mandatory Greenhouse Gas Emissions Reporting framework, which has been in place since 2013 for quoted companies.

●      It requires energy and emissions disclosures to be included in company annual reports for all quoted or large UK businesses for financial years starting on or after 1 April 2019.

●      The government has announced ambitious measures to help industry decarbonise and reduce costs, including the £315m Industrial Energy Transformation Fund, £250m Clean Steel Fund, the £505 million Energy Innovation programme, the £18m Industrial Heat Recovery Support programme, the Climate Change Agreements Scheme (worth an estimated £300m per annum) , the £6m Boosting Access for SMEs to energy efficiency competition, and the £170m Industrial Decarbonisation Challenge - supporting our mission to establish the world's first net zero cluster by 2040, and at least one low-carbon cluster by 2030.