SECR review 2026: what the government's findings mean for your next carbon report

The government's SECR review, a post-implementation review published by DESNZ on 26 May 2026, recommends keeping Streamlined Energy and Carbon Reporting with targeted changes: clearer rules on eligibility and group boundaries, a standard disclosure template and closer alignment with ISSB, CSRD and TCFD. Nothing changes yet. A consultation on SECR and ESOS reform is still to come.

That is the short version. The longer version is more useful, because the review is the first time the government has measured what SECR actually costs companies and where the effort goes. Read closely, it says the hard part of SECR was never the maths. It was deciding what is in the boundary and keeping the same numbers consistent across every other report that asks for them.

What did the SECR review find?

The review looked at SECR from its start on 1 April 2019, drawing on a business survey, interviews, consultation responses and energy consumption data. Its headline is that the regime has largely done what it set out to do. The detail is more interesting.

• Transparency went up: 79% of businesses said they disclosed data under SECR that they would not otherwise have published.
• Energy savings, fading: SECR is estimated to have contributed to energy savings of around 4.5% in 2020 and 6.2% in 2021 among in-scope unquoted companies and LLPs, though the review suggests the effect may be shrinking.
• Compliance is patchy: estimated non-compliance is 14% to 23%, with gaps concentrated among private companies and LLPs, where enforcement is lighter.
• Far more companies in scope: the review counts 19,900 companies and LLPs in scope against 11,300 predicted when the rules were designed, 76% more.
• Costs are higher than expected: the average complier spends 94 hours of staff time a year (about £2,500), 56% also pay consultants or auditors, and the mean total ongoing cost is £7,100 a year.
• Treated as compliance: companies mostly see SECR as a box to tick, and it is rarely connected to their decarbonisation planning.

One line in the survey results deserves more attention than it got. Most respondents said total energy use, Scope 1, Scope 2 and efficiency actions were easy to compile. Intensity ratios and Scope 3 were the hard parts. The statutory minimum is manageable. Everything around it is where time disappears.

What changes does the SECR review recommend?

The review recommends keeping SECR and making targeted amendments. These are recommendations only, and any change has to go through consultation first.

1. Clearer guidance on who is eligible, which sites to include and how group reporting boundaries work.
2. A standardised disclosure template, so reports are comparable and easier to extract data from.
3. Less duplication, by aligning definitions and metrics with the ISSB standards, the EU CSRD and TCFD.
4. Light-touch forward-looking elements, such as optional targets or a short narrative.
5. Central digital access to SECR data, to help benchmarking.

Separately, the Modernising Corporate Reporting consultation, published on 7 September 2026 and open until 30 November 2026, proposes removing the directors' report. SECR currently sits there, so it would move: companies could place it anywhere in the first half of the annual report. The government has also said it intends to consult on SECR and ESOS reform later in 2026. As of 6 November we have not seen that consultation published.

When will SECR change?

Not for this reporting cycle. The review is evidence for a consultation that has not opened yet, and any change to the regulations would follow the consultation and a government response. If your financial year ends in December 2026, report under the current rules, which our guide to SECR reporting requirements sets out in full.

What is likely to arrive first is the change in location. If the directors' report goes, SECR moves with it, and the people who own the annual report will want to know where your energy and carbon section sits and who signs it off.

Our view: the boundary problem is the real finding

Strip out the policy language and the review says three things companies already know. More businesses are caught than anyone planned for. Many of them pay a consultant to get through it. And the same energy and emissions data gets reworked for SECR, ESOS, TCFD and carbon reduction plans, with slightly different definitions and boundaries each time, producing numbers that do not quite match.

We hear that last point constantly. A privately owned company we spoke to this week runs its carbon data in spreadsheets, submits to CDP and, by the count of the person who runs sustainability there, reports through more than a dozen customer and risk portals on top. Their Scope 1 and 2 numbers are in decent shape. The cost is in answering the same question fifteen ways.

That is why we would not wait for the template. A standard SECR form will help comparability, but it will not fix a boundary that changes every time a site is acquired or a lease ends. The companies that will find the reformed SECR easy are the ones that already keep one inventory with a clear boundary, one owner per data source and a record of every estimate. Our guide to Scope 1 and 2 emissions covers the basics of getting that inventory right.

What should large companies do before the SECR consultation?

1. Write down your boundary: the consolidation approach, every entity and site in scope, and what happens when you buy or close one. This is the first thing the review wants clarified, so expect it to be scrutinised.
2. Collect once, report many times: use the same 12 months of energy data for SECR and ESOS Phase 4, and record any difference in definition rather than collecting twice.
3. Map SECR to IFRS S2 now: UK SRS S2 is based on IFRS S2, and the review wants SECR metrics aligned with it. Listed companies apply UK SRS on a comply or explain basis from 2027, so the overlap is already real for them.
4. Explain your year-on-year change: the 2026 government conversion factors cut the UK electricity factor by 26%, so separate the factor effect from real consumption changes, as we explained in our piece on DEFRA emission factors 2026.
5. Give SECR a forward look: the review floats optional targets and narrative. If you already have a reduction plan, a short paragraph linking it to your SECR figures costs little and anticipates where the rules are heading.
6. Respond to the consultations: the Modernising Corporate Reporting consultation closes on 30 November 2026, and the SECR and ESOS consultation is still to come. Companies that have done this work have the most useful evidence to give.

How Ella makes SECR the easy part

Ella is carbon accounting software built as an AI agent, and it is the most guided way we know to run SECR. It sets your boundary from how the business operates, builds your Scope 1 to 3 checklist instantly and sends collect links to the people who hold energy bills, fuel cards and mileage claims. It tracks who has not replied and chases them, reads the bills and spend exports they send in any format, and calculates emissions with the current conversion factors.

The SECR summary, your ESOS energy data, CDP answers and IFRS S2 metrics then come from one audit-ready data set with a source on every number, and Ella's sustainability team is there when you want a second opinion on the boundary.