The SECR framework was introduced to enhance transparency in energy usage and carbon emissions among large businesses in the UK. It replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, expanding the requirement for energy and carbon reporting. This initiative is part of the UK government's broader strategy to promote environmental responsibility among corporations and contribute to achieving Net Zero 2050 targets.

SECR is mandatory for large UK businesses, including quoted companies, unquoted companies that meet certain criteria, and large LLPs. These criteria are based on the Company’s Act 2006 definition of “large,” which typically includes having at least 250 employees, an annual turnover of more than £36m, or an annual balance sheet of over £18m. However, organizations using 40MWh or less energy during the reporting period are exempted.

Under SECR, qualifying businesses are required to annually report on their energy and carbon emissions, as well as any efficiency measures taken throughout the year. This reporting includes global energy use and greenhouse gas emissions for quoted companies, and UK energy use and associated greenhouse gas emissions for large unquoted companies and LLPs. The framework requires a narrative description of energy efficiency actions, along with the methodology used for calculating the disclosed information.

The implementation of SECR aims to encourage large businesses to monitor and manage their energy use and carbon emissions more effectively. By making such information publicly available, the regulation seeks to increase corporate accountability and incentivize improvements in energy efficiency. This contributes to the broader effort of reducing the UK's carbon footprint and promoting sustainable business practices.

To comply with SECR, affected companies must include in their annual reports detailed information about their energy consumption, greenhouse gas emissions, and energy efficiency measures. They are required to provide a comparative figure for the preceding year's energy use and emissions (where applicable), and to ensure that the methodology used for these calculations is transparent and consistent.