Key takeaways:
- Both are mandatory. SECR ensures emissions are disclosed in financial reporting, and CSRD is a wider sustainability disclosure.
- SECR focuses on the company’s own operations, designed to be less of a burden, whereas CSRD delves into the broader supply chain, aiming to give a full and detailed picture.
- UK companies that have significant EU operations meeting the relevant thresholds can comply with both frameworks.
- Regulatory demands on emission reporting are increasingly stringent.
For large businesses today, emissions reporting is no longer optional.
There are 2 major reporting frameworks shaping the way companies disclose their carbon emissions and broader environmental social and governance performance: the UK’s Streamlined Energy and Carbon Reporting framework (SECR), and the EU’s Corporate Sustainability Reporting Directive (CSRD).
Both carry strict disclosure requirements, but they differ significantly in scope, who they apply to, and what they demand.
Whether you’re managing energy costs, tracking energy consumption across UK energy operations, or navigating climate-related risks across your supply chain, understanding which framework applies to your business is the first step toward compliance and long-term net zero progress.
What Is SECR?
Streamlined Energy and Carbon Reporting is a regulatory framework requiring large UK companies to report on their energy use or greenhouse gas emissions annually.
The framework is managed under the Companies (Directors’ Report) and Limited Liability Partnerships Regulations 2018.
Who Needs to Comply With SECR?
It was introduced in 2019 and it must be used by large companies with 2 of the 3 following criteria: 250 employees, £36 million in turnover, or £18 million in assets.
Emission calculations must include intensity ratios, such as emissions per £1M revenue, and full reports are incorporated into annual financial reports.
What Does SECR Require Companies to Report?
SECR outlines a variety of reporting requirements.
Quoted companies must report on global Scope 1 and 2 GHG emissions and underlying global energy use, as well as GHG and energy data from previous years.
They must provide at least one intensity ratio (e.g., emissions per unit of production) and report on energy efficiency actions taken, the methodology used for calculations, and the proportion of total emissions and energy use that relate specifically to the UK.
Large unquoted companies and LLPs (Limited Liability Partnerships) are required to report greenhouse gas emissions related to UK-based energy use, specifically covering activities such as transport, gas, and electricity.
They must also report at least one emissions intensity ratio, provide a narrative on energy efficiency measures, and include data on purchased electricity for their own use.
SECR Reporting Deadlines
SECR reporting deadlines are aligned to a company’s financial year, usually 6 or 9 months after the year ends.
Because finances are reported annually, SECR lies within this annual report.
Companies must report data every year by this date, else become non-compliant and break reporting rules. Beyond fines, this weakens reputations and causes problems with audits.
Qualifying thresholds are based on annual turnover, total assets, and headcount measured across the reporting period.
What Is CSRD?
CSRD is a much broader EU framework than SECR that encompasses full ESG (environmental, social, governance) within its scope beyond just energy and carbon.
Where SECR looks at the first two scopes, CSRD delves into Scope 3 supply chain emissions as well.
Both are mandatory. SECR ensures emissions are disclosed in financial reporting, and CSRD is a wider sustainability disclosure.
Who Needs to Comply With CSRD?
CSRD is mandatory for large EU companies that meet at least two of the following criteria: over 250 employees, a turnover of €50m or more, or over €25m in assets.
It’s also non-optional for EU-listed companies (not necessarily EU-based but with shares on an EU stock exchange) with SMEs being phased in. Those choosing to operate within the EU market must follow the market’s framework.
If non-EU companies generate over €150m in revenue within the EU and have a large EU subsidiary or branch, they must also comply.
Does CSRD Apply to UK Companies?
CSRD applies to UK companies with shares in an EU stock exchange, or with an EU subsidiary or branch and over €150m EU revenue.
What Does CSRD Require Companies to Report?
CSRD requires environmental emissions, Scopes 1-3, and climate risks and targets.
This is where it transcends SECR’s scope, extending into workforce labour considerations and supply chain impacts to keep companies responsible for internal conditions and human rights risks.
It focuses on governance, with the ethics of the business explored to ensure issues aren’t ignored once they get to leadership level.
Moreover, CSRD requires a double materiality assessment: how a company impacts the world and how the world impacts the company.
By including metrics and targets, it gauges if the company is improving in line with targets.
Third-party verification adds credibility to their data and mitigates greenwashing practices. CSRD’s related disclosures also align with the Task Force on Climate-related Financial Disclosures (TCFD), covering energy usage and broader climate risks.
CSRD Reporting Deadlines
While SECR deadlines are tied to a financial year’s end, CSRD deadlines are linked to a specific EU rollout timeline depending on company type.
For example, a large EU company may need to start reporting 2024 data in 2025, but a non-EU company with some EU operations may not be required to report until 2028.
SECR vs CSRD: Key Differences
Scope of Reporting
As touched on before, SECR zooms into the energy and emissions of an organisation, while CSRD covers business operations from supply chain to external impact.
SECR focuses on the company’s own operations, designed to be less of a burden, whereas CSRD delves into the broader supply chain, aiming to give a full and detailed picture.
Single Materiality vs Double Materiality
SECR focuses on single materiality, or what impacts a company financially. Key examples are energy prices rising, fuel costs increasing, or extreme weather.
These factors feed directly into risk management strategy and can materially affect a company’s balance sheet.
By expanding into double materiality, CSRD also considers what the company is affecting. This can then look like considering working conditions, deforestation, pollution, or wasteful packaging.
Rather than focusing only on the company, double materiality also considers the company’s impact on the world.
Emissions Coverage (Scope 1, 2 and 3)
SECR involves Scope 1 (direct) and Scope 2 (indirect) emissions, the two simplest to measure, to keep it low-burden.
CSRD expands this to include Scope 3, covering supply chain emissions.
Scope 3 is absolutely necessary but hard to measure without a carbon management software such as Gaia’s. We automate supplier data collection, estimate missing data, and enable full Scope 1, 2 and 3 reporting alongside SECR compliance. Learn more here.
Third-Party Assurance Requirements
With SECR’s internal, narrower realm of focus, data is self-reported by the company and checked within a financial audit.
CSRD, on the other hand, requires companies to report their data, then appoint an independent auditor to thoroughly verify the information.
Who They Apply To
SECR applies to UK companies over a certain threshold, and CSRD applies to large EU companies meeting 2 of their 3 criteria, as highlighted above.
Non-EU companies must also operate under the CSRD framework when they have significant operations within the market.
Can a UK Company Be Subject to Both SECR and CSRD?
UK companies that have significant EU operations meeting the relevant thresholds can comply with both frameworks.
In this case, they not only produce annual SECR disclosures but also full CSRD reports for their EU requirements.
Managing both frameworks is complex. Software like Gaia covers all scopes and generates both SECR and CSRD-compliant reports in a single platform.
With software producing SECR and CSRD-compliant reports in a click, software like Gaia is invaluable for navigating complex frameworks.
What’s Replacing SECR? The UK Sustainability Reporting Standards (UK SRS)
The UK Sustainability Reporting Standards are what could replace the UK’s SECR in the future.
With the EU delivering stricter, more standardised rules within CSRD, the SRS is the UK’s response to stay competitive.
When Will UK SRS Become Mandatory?
For the time being, SRS’s rules aren’t in force entirely as they are still being created. That being said, its implementation was confirmed by the UK government on 25th February 2026. It’s expected to take place from 2027.
How Does UK SRS Differ From CSRD?
While SECR is strategically low-burden for easy compliance and CSRD is comprehensive for full transparency, SRS is a fair middle ground.
SRS is single materiality only like SECR, requiring Scope 1-2 and incorporating Scope 3 when relevant.
With SRS undertaking an investor focus, money is more likely to be funnelled into companies demonstrating long-term climate risk.
How to Prepare for Both Frameworks
You can prepare for both frameworks with carbon management software.
Regulatory demands on emission reporting are increasingly stringent, making carbon management software an essential tool for staying compliant and avoiding costly penalties.
A primary benefit of SECR and CSRD alignment is compliance with tightening carbon regulations, subsequently avoiding fines of up to millions of pounds.
Carbon management software helps businesses stay prepared for evolving regulations. By accurately monitoring and measuring them, it’s easy to implement reduction measures to meet new legislation.
In compliance with carbon regulations, companies using carbon management software can further strengthen relationships with regulators like the UK Environment Agency, while also supporting eligibility for government incentives like Enhanced Capital Allowances (ECAs).
Start With Your Scope 1 and 2 Data
The first emissions to begin assessing will always be Scope 1 and 2, as they’re much easier to measure.
Scope 1 involves direct emissions produced by the company itself, such as any fuel burned, manufacturing emissions, and generators. The data is readily available in-house, easily verifiable, and can be adjusted immediately.
Scope 2 is then indirect emissions purchased by the company, such as office electricity, data centre energy, or purchased heat and steam in buildings. The company can easily track their purchased emissions and amend this.
Build Toward Scope 3 Readiness
After hotspots have been identified in Scope 1 and Scope 2, you can begin to tackle Scope 3 value chain and downstream emissions.
This is where businesses can hit a wall. Supplier data is inconsistent and gaps are common. Software like Gaia handles this automatically, pulling supplier data and estimating gaps so reporting doesn’t stall.
Use Software to Stay Audit-Ready
Gaia’s AI-powered carbon management software is one of the strongest emission solutions for UK businesses across all scopes.
It’s aligned with the Greenhouse Gas Protocol as the leading industry standard, including the annual UK GHG conversion factors provided by DEFRA and DESNZ, ensuring your calculations follow best practices.
Generate compliance reports in one click, including SECR and CSRD reports, and forget the admin burden with AI-powered data collection across Scope 1, 2 and 3.
Integrate seamlessly with your favourite apps or import from a spreadsheet, and pull insights from the analytics dashboard to make data-driven decisions that boost your sustainability efforts. Learn more here.
More Information
FAQs
Is SECR Being Scrapped?
The UK Sustainability Reporting Standards are what could replace the UK’s SECR in the future. Its implementation was confirmed by the UK government on 25th February 2026. It’s expected to take place from 2027.
Does CSRD Apply to UK Companies After Brexit?
CSRD applies to UK companies with shares in an EU stock exchange, or with an EU subsidiary or branch and over €150m EU revenue.
What Is Double Materiality?
CSRD requires a double materiality assessment: how a company impacts the world and how the world impacts the company.
What Happens If You Don’t Comply With SECR or CSRD?
Companies must report data every year by their reporting deadline date, else become non-compliant and break reporting rules. Beyond fines, this weakens reputations, and problems with audits.