Law & Compliance

Making your Building Compliant with Energy Legislation

In order to encourage property owners and occupiers to improve the energy efficiency of property, the government introduced legislation that materially affects companies that occupy buildings and run transport fleets and impacts on property values.

Streamlined Energy & Carbon Reporting (SECR) came into force on April 1st 2020, and qualifying organisations are required to report on energy use and resulting carbon emissions annually via the SECR framework, this is in addition to the ESOS reporting every 4th year.

The scheme forms part of the UK Government’s Clean Growth Strategy, which calls on businesses to improve energy productivity by at least 20% by 2030.   This has effectively replaced the reporting element of the CRC Energy Efficiency Scheme.

SECR covers all large companies with:

  • more than 250 employees
  • an annual turnover of more than £36m
  • a balance sheet of £18m or more

This includes LLPs and unregistered businesses and you will be covered if you meet two out of three from the above criteria.

Firms that use less than 40,000kWh of energy across a year are exempt,

Who Qualifies?

The SECR framework applies to companies registered under the Companies Act 2006.  This means that organisations which are not registered as companies, for example, public sector organisations, some charities, and some private sector companies such as certain partnerships, may not be in the scope of the SECR framework.

What and How do I report?

You will be required to report energy use and carbon emissions for a 12 month period that can match your financial year. The results are required to be reported in the following way:

What happens if we do not comply?

There will be legal and financial implications for companies not complying. LLPs that fail to comply with the requirement to prepare an Energy and Carbon Report risk prosecution and a potential fine for all Companies House registered members of the LLP. Company secretaries from quoted companies will be liable for prosecution under the existing terms of the Companies Act.

With regards to enforcement, Companies House may not accept reports that do not meet the requirements of the Companies Act.

We can help

Low Carbon Alliance can support you in preparing your SECR report and would be pleased to provide you with a quote

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. Organisations that qualify for ESOS must carry out ESOS assessments every 4 years. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.

Key points to note:

  • Captures all Non-SME’s with either:
    • more than 250 employees or
    • a turnover in excess of €50m and
    • an annual balance sheet total of €43m.
  • The Environment Agency will publish the names of any businesses that fail to comply and will issue fines appropriate to the level of non-compliance.
  • Every ESOS compliance submission must be managed by an approved ‘Lead Assessor’ and Low Carbon Alliance’s own Lead Assessors are ready to assist your business ahead of the Phase 3 deadline.
  • ESOS Phase 3 qualification date is 31st December 2022. The four year compliance phase runs from 6th December 2019 until 5th December 2023.
  • ESOS Phase 4 has been confirmed.  Start of submission date: 31st Dec 2026 with the deadline 5th Dec 2027

The Minimum Energy Efficiency Standard (MEES)  came into force in England and Wales on 1 April 2018 and applies to private rented residential and non-domestic property. It is aimed at encouraging landlords and property owners to improve the energy efficiency of their properties by restricting the granting or continuation of tenancies where the property has an Energy Performance Certificate Rating of F or G.

Key Points to note:

  • The Minimum Energy Efficiency Standard Rating is E and above.
  • Applies to new leases and renewals from 1 April 2018 and all leases from 2023.
  • Some exemptions (third party consent, cost effective works test).
  • Financial Penalties for non-compliance £2,000 – £150,000.

With in-house engineering Low Carbon Alliance can guide you through the process of improving the energy efficiency of your property portfolio, to mitigate the risk on non-compliance.

Contact us for a free initial consultation