As regulatory pressure increases and stakeholders demand accountability, organisations of all sizes are being called to measure, report and reduce their carbon emissions.

Why carbon reporting is crucial for UK businesses

For many organisations, carbon reporting marks the first meaningful step on their sustainability journey. The act of measuring emissions, disclosing them publicly, and committing to reduction strategies signals to stakeholders that you’re serious about climate action.

But beyond reputation, the stakes are higher:

  • Regulatory compliance: Frameworks like SECR make carbon and energy reporting mandatory for large UK businesses.
  • Investor confidence: ESG-focused investors demand climate disclosures.
  • Cost optimisation: Identifying inefficiencies in energy consumption can uncover areas for operational improvement.
  • Competitive advantage: Tenders and supply chains increasingly require proof of carbon responsibility.

In essence, carbon reporting serves both as a compliance necessity and a strategic enabler.

 

What is carbon reporting and what does it involve?

Carbon reporting is the structured documentation of your organisation’s GHG emissions over a specific time period. It requires collecting data across multiple departments and sources, converting it into carbon equivalents and then publishing this information through public or internal reports.

Carbon reporting involves the systematic measurement and disclosure of an organisation’s GHG emissions.

It encompasses:

  • Data collection: Utility bills, fleet data, employee travel, procurement, waste and more. Having a carbon monitoring system can help support accurate data collection here.
  • Calculation methodology: Applying UK government conversion factors or international protocols.
  • Emission categories: Scope 1 (direct), Scope 2 (indirect energy) and Scope 3 (value chain).
  • Disclosure: Annual reports, ESG frameworks or sustainability platforms like CDP.
  • Auditability: Documenting assumptions and processes to ensure data can be verified.

Accurate carbon reporting enables businesses to identify emission hotspots, set reduction targets and track progress over time.

 

Understanding UK carbon reporting requirements (SECR & GHG Obligations)

In the UK, the most important regulatory mechanism is the Streamlined Energy and Carbon Reporting (SECR) framework. Introduced in 2019, SECR simplified earlier frameworks like the CRC Energy Efficiency Scheme and extended carbon disclosure obligations to a broader group of businesses.

Streamlined energy and carbon reporting (SECR)

Introduced in April 2019, SECR aims to simplify and broaden the scope of energy and carbon reporting. It replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and now requires approximately 11,900 UK-incorporated companies to disclose their energy use and carbon emissions.

Who needs to comply?

  • Quoted companies: Those listed on the main market of the London Stock Exchange or other recognised exchanges.
  • Large unquoted companies and LLPs:  Organisations meeting at least two of the following criteria:
    • Turnover of £36 million or more.
    • Balance sheet total of £18 million or more.
    • 250 or more employees.

Reporting obligations:

  • Total UK energy use (electricity, gas and transport).
  • Associated GHG emissions (Scope 1 and 2; Scope 3 is voluntary but encouraged).
  • At least one emissions intensity ratio (e.g. emissions per unit of turnover).
  • Description of energy efficiency actions taken during the reporting period.
  • Methodologies used for calculations.

Exemptions:

Companies consuming 40MWh or less during the reporting period are exempt but must state this in their Directors’ Report.

 

Key reporting standards: Ensuring accuracy and credibility

Adhering to recognised standards ensures that your emissions reporting is credible, comparable and aligned with international best practices.

The three most common reporting standards:

  • GHG protocol: Provides comprehensive guidance on measuring and managing GHG emissions.
  • ISO 14064: Specifies principles and requirements for quantifying and reporting GHG emissions and removals.
  • CDP (Carbon disclosure project): Encourages companies to disclose environmental data, promoting transparency.

These frameworks support businesses in meeting carbon emission reporting standards and enhancing the quality of their disclosures.

How to report emissions across scope 1, 2, and 3

To build a complete carbon footprint, organisations must break down emissions into three scopes:

Scope Definition Examples
Scope 1 Direct emissions from assets owned/controlled by the company On-site fuel combustion, company vehicles
Scope 2 Indirect emissions from purchased electricity, heating, and cooling Electricity purchased for buildings
Scope 3 All other indirect emissions in the value chain Employee travel, purchased goods, waste, downstream use

Why scope 3 matters

Scope 3 emissions often account for over 70% of a company’s total footprint. While not mandatory under SECR, ignoring them presents a risk to credibility. A phased approach—starting with material categories like business travel or purchased goods, is recommended.

 

How to implement effective carbon emission reporting practices

To establish robust carbon emissions reporting, organisations should:

  1. Define organisational boundaries: Determine the scope of operations to be included.
  2. Collect relevant data: Gather information on energy consumption, travel, waste and other emission sources.
  3. Apply appropriate conversion factors: Utilise government-provided factors to translate activity data into emissions.
  4. Calculate emissions: Quantify emissions across Scopes 1, 2 and 3.
  5. Validate data: Ensure accuracy through internal checks or third-party verification.
  6. Report findings: Disclose emissions data in annual reports or sustainability disclosures.

By following these steps, companies can achieve compliance with carbon reporting regulations and contribute to environmental sustainability.

 

Common mistakes to avoid in GHG emissions reporting

Even well-intentioned businesses make errors that compromise their reporting integrity.

Avoid these pitfalls:

  • Using outdated conversion factors – leads to skewed results.
  • Inconsistent boundaries – switching methodologies year-on-year reduces comparability.
  • Excluding material Scope 3 emissions – can be seen as greenwashing.
  • Lack of audit – makes it impossible to verify data under scrutiny.
  • Over-relying on estimates – when better data is available.

These mistakes can be costly, not just in regulatory terms but in brand credibility. Get it right from the start with proper governance and expert guidance.

 

How to integrate carbon reporting into sustainability strategies

Effective carbon reporting serves as a foundation for broader sustainability initiatives. By aligning reporting efforts with Environmental, Social and Governance (ESG) objectives, businesses can:

  • Set measurable targets: Define clear goals for emission reductions.
  • Monitor progress: Track advancements towards sustainability benchmarks.
  • Engage stakeholders: Communicate commitments and achievements transparently.

Incorporating carbon reporting requirements into strategic planning enhances organisational resilience and environmental stewardship.

 

Conclusion

Complying with carbon reporting requirements in the UK is more than a regulatory obligation; it’s a strategic imperative. Transparent GHG emissions reporting empowers organisations to:

  • Demonstrate accountability: Show commitment to environmental responsibility.
  • Drive performance: Identify opportunities for operational improvements.
  • Build trust: Strengthen relationships with stakeholders through openness.

By embracing comprehensive carbon emission reporting, businesses contribute meaningfully to global sustainability efforts and prepare their net zero plan.