The Plain-English Guide to SECR Compliance for UK SMEs (2026 Update)

Let me save you some time.

If you’ve landed here, you’ve probably seen “SECR” mentioned in a tender, heard it from your accountant, or spotted it in a competitor’s annual report — and you’re wondering: Does this actually apply to me? And if so, what do I actually have to do?

Good news: Streamlined Energy and Carbon Reporting (SECR) isn’t as complicated as it looks. The problem is that most guidance is written by lawyers, for lawyers.

This guide is different. I’ll explain SECR the way I’d explain it to a business owner — no jargon, no waffle, just the stuff that actually matters for your 2026 compliance.

First, the honest answer: Why should you care about SECR?

Here’s what I won’t do: pretend carbon reporting is exciting. Here’s what I will do: tell you why it’s becoming a massive competitive advantage.

Three things are happening at once:

1. Your customers are asking. Large companies now have their own carbon reporting obligations. To hit their targets, they need data from their supply chain — which means you. If you can’t provide credible numbers quickly, you’re a procurement risk.
2. Banks and insurers are paying attention.Climate risk is moving into underwriting decisions. Lenders want to know you understand your energy exposure. “We don’t really track that” is becoming a very expensive answer.
3. The FRC is watching. The Financial Reporting Council (FRC) oversees these disclosures. “Greenwashing” now includes making climate claims you can’t back up with data in your annual report.

The bottom line: Even if SECR doesn’t legally apply to you today, the capability to produce trustworthy carbon data is becoming a requirement to do business with the “big players.”

Does SECR actually apply to my business?

You are typically in scope if you hit at least two of these three thresholds in your financial year:

Note: If you’re part of a group structure, the rules can get sticky. Always check with your accountant if you’re hovering near these limits.

The “Low Energy User” Exemption

If your total UK energy consumption is 40 MWh or less per year, you qualify as a “low energy user.” You can skip the detailed reporting, but you still must state in your report that you are a low energy user.

What you actually have to report (in plain English)

SECR boils down to four key areas:

1. Scope 1: The stuff you burn

Emissions from fuel you burn directly in things you own or control.

• Examples: gas for heating your warehouse, diesel in company-owned vans, or petrol in company cars.

2. Scope 2: The electricity you buy

Emissions from the electricity you purchase from the grid to power your operations.

• Examples: office lighting, warehouse machinery, and charging company EVs.

3. Scope 3: The “Grey Fleet” (Mandatory)

This is where many SMEs get tripped up. Under SECR, you must report emissions from business travel in rental cars or employee-owned vehicles where the company pays for the fuel/mileage.

• Example: a sales rep driving their personal car to a client meeting and claiming mileage.

4. Intensity Ratio & Narrative

• Intensity ratio: compare your emissions to a business metric (e.g., tonnes CO₂e per £1m revenue).
• Efficiency narrative: describe what you did this year to save energy and what you plan to do next.

Where SMEs usually get stuck (and how to avoid it)

The maths isn’t the hard part; the data chase is what causes the panic.

Typically, electricity bills are in Finance, gas bills are with Facilities, and fleet data is on a spreadsheet in Operations. When the annual report deadline looms, someone has to play “detective” to find it all.

The fix:

1. Assign an owner: one person needs the authority to chase data across departments.
2. Monthly data drops: don’t wait for year-end. Collect bills and receipts monthly.
3. Audit trails: every number should trace back to an original bill.

Why spreadsheets break (and what to do instead)

Spreadsheets are fine for a start, but they eventually lead to version chaos and broken formulas. A proper carbon intelligence platform like Wulo helps by:

• Automating calculations with the latest recognised emission factors.
• Pulling data through integrations so you don’t chase PDFs.
• Generating audit-ready outputs for your annual report.

Looking Ahead: UK SRS is here

You’ll start hearing more about UK Sustainability Reporting Standards (UK SRS). These are the UK-endorsed versions of the global ISSB standards.

The 2026 reality: the UK is phasing these in for the largest companies. Most SMEs aren’t the primary target yet, but your bank and your biggest customers are. Getting SECR right today future-proofs you for the transition.

Your SECR Quick-Start Checklist

• Check the thresholds: do you hit 2 of 3 (250 staff / £36m turnover / £18m balance sheet)?
• Estimate energy use: are you above 40 MWh?
• Gather “grey fleet” data: collect mileage claims from the last 12 months.
• Pick an intensity metric: tonnes CO₂e per £1m revenue is a strong default for SMEs.
• Draft your narrative: list 3 efficiency actions you took this year.

Want help getting SECR-ready?

If you’d rather not figure this out alone, we’re here to help:

Disclaimer: This article is educational guidance, not legal advice. SECR rules can vary based on group structures; always confirm details with your auditor or legal advisor.