While SECR initially targeted large companies, it has gradually extended its scope. For SMEs, the legislation applies if they meet two or more of the following criteria: 

1. turnover of £36 million or more, 
2. balance sheet total of £18 million or more; 
3. or 250 employees or more. 

Consequently, a significant number of SMEs fall within the scope of SECR. That’s why we’ve put together five main reasons why SECR is important for SMEs to include in their regulatory and reporting processes - even if only from afar! 

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1. Environmental Responsibility

‍SECR legislation emphasises environmental responsibility and provides an opportunity for SMEs to align themselves with sustainable practices. By understanding and complying with SECR, SMEs can demonstrate their commitment to reducing carbon emissions and mitigating climate change, enhancing their reputation and attracting environmentally conscious customers, partners, and investors.

2. Cost Savings

Improved energy efficiency, which is one of the key goals of SECR, can lead to substantial cost savings for SMEs. By monitoring and reporting energy consumption, SMEs can identify areas where they can reduce wastage, optimise processes, and cut energy bills. Energy-efficient practices not only contribute to a greener future but also improve the bottom line for SMEs.

3. Competitive Advantage

‍SMEs that embrace SECR gain a competitive edge in the market. Many larger organisations are already prioritising sustainability in their supply chains and partnering with environmentally responsible businesses. By understanding SECR and implementing energy-efficient measures, SMEs position themselves as reliable and eco-friendly partners, attracting more business opportunities and securing long-term success.

4. Access to Funding

‍Understanding SECR can also facilitate SMEs' access to funding and financial support. Many financial institutions, investors, and grants favour businesses that prioritise sustainability. By complying with SECR and showcasing their commitment to reducing carbon emissions, SMEs can enhance their eligibility for green financing options, grants, and other incentives aimed at supporting sustainable initiatives.

5. Regulatory Compliance

‍Non-compliance with SECR can have legal implications and damage a company's reputation. Understanding the legislation helps SMEs avoid penalties and potential legal consequences, ensuring compliance with regulatory requirements. Furthermore, early adoption and proactive engagement with SECR can prepare SMEs for future sustainability-related legislation, keeping them ahead of the curve.

The SECR legislation in the UK presents a valuable opportunity for SMEs to demonstrate their environmental responsibility and realise cost savings. By understanding SECR and actively participating in energy efficiency initiatives, SMEs can contribute to a greener future while reaping numerous benefits for their businesses. It is imperative for SMEs to familiarise themselves with SECR, seek professional guidance if needed, and capitalise on the advantages it offers to enhance their sustainability, reputation, and long-term success.

Start your journey by measuring and managing your carbon emissions.