SECR in Focus: What the 2026 Review Means for UK Businesses

The government’s 2026 post‑implementation review of the SECR regulations 2018 lands with a clear message for UK businesses: SECR is staying, but there is a need to make it simpler, more consistent and better aligned with the wider ESG reporting landscape.

The review offers a balanced verdict: SECR has broadly delivered its policy objectives by improving transparency and consistency in energy and carbon reporting. Yet, it also recognises what many in-house teams already know: compliance can be administratively heavy, especially where SECR overlaps with other disclosure regimes.

For businesses in scope, the practical takeaway is simple: there is no immediate change, but now is the time to review data, governance and duplication across reporting processes before the next round of reform.

What is SECR and who does it apply to?

SECR is the UK regime requiring certain larger organisations to report energy use and greenhouse gas emissions in their annual reports. Introduced in 2019, it extended carbon reporting beyond quoted companies to large unquoted companies and LLPs.

In broad terms, SECR applies to quoted companies and to large unquoted companies and LLPs meeting at least two of the usual size thresholds for turnover, balance sheet total and employees. Some subsidiaries can rely on group reporting, and low energy users may qualify for a limited exemption.

SECR was introduced to address a clear market failure: the lack of transparent, consistent information on corporate energy use and greenhouse gas emissions. This information gap created barriers for investors seeking to assess climate-related risks and for companies aiming to identify cost-effective energy efficiency opportunities.

A framework that broadly works

The review’s core conclusion is reassuring: SECR is broadly working. It has improved transparency, expanded reporting coverage and helped bring energy and carbon data into mainstream reporting and governance. 

In particular, the review finds that SECR has:

• Enhanced transparency for investors and stakeholders, ensuring more consistent disclosure of energy use and emissions;
• Increased internal awareness of energy consumption and costs, driving greater management focus; and
• Expanded the coverage and comparability of reporting, particularly across large unquoted companies and LLPs.

More broadly, the framework is recognised as a key contributor to embedding carbon and energy considerations into corporate governance and reporting practice.

But not without friction: burden, complexity and overlap

Despite these positive findings, the review also identifies persistent challenges—many of which will resonate with businesses. These include: administrative burden and reporting complexity, particularly in the early years of compliance; inconsistency in methodologies and interpretation, which still affects comparability and can make compliance more resource-intensive than it needs to be; and overlap with other reporting frameworks, creating duplication and inefficiency across ESG disclosures.

Reporting has improved, but behaviour change is harder to prove

The review is more cautious on whether SECR has directly driven emissions reductions. It points to improved awareness and some reductions in energy use, but says it is harder to isolate SECR’s impact from wider market and policy drivers.

That is not especially surprising. Reporting improves visibility, but it does not automatically drive lasting operational change, particularly once the easier efficiency gains have already been made.

The review also notes that SECR is rarely decisive for investment decisions, with investors often placing greater weight on broader frameworks such as TCFD and CSRD. That adds to the case for more joined-up reporting.

For businesses, the real value lies in using reporting to support governance, accountability and a wider energy and carbon strategy, rather than treating it as a standalone annual exercise.

What happens next: simplification, alignment and consultation

Looking ahead, the review’s most important message is that any future reform is likely to focus on making SECR easier to use and better aligned with the rest of the reporting landscape, rather than fundamentally redesigning the regime.

Since SECR was introduced, the reporting landscape has become more crowded. Businesses may now also be dealing with ESOS, TCFD-aligned disclosures, Carbon Reduction Plans and, in some cases, CSRD. The review therefore points firmly towards simplification and better alignment.

Likely areas of focus include:

• Clearer guidance and more consistent reporting, including standardisation to improve comparability.
• Less duplication across regimes, particularly through closer alignment with wider climate and sustainability disclosures.
• Maintaining behavioural impact, without making the regime materially more burdensome.
• Better usability of reported data, including improved digital access and benchmarking.

These issues are expected to be explored through a planned 2026 consultation on streamlining energy and emissions reporting, which is likely to be an important opportunity for businesses to push for greater proportionality and coherence.

What businesses should do now

The immediate message is not that businesses need to change course overnight. It is that this is a sensible moment to sense-check scope, data quality, governance and overlap with other reporting obligations.

1. Expect evolution, not overhaul
SECR remains in place, but the direction of travel is clearly towards streamlining and integration.

2. Review overlap with other disclosures
Businesses should assess where SECR reporting duplicates other climate and sustainability requirements.

3. Strengthen data and governance now
Robust systems should make compliance easier and put businesses in a stronger position for future reform.

4. Engage with the consultation
The next consultation may offer a real opportunity to shape a more proportionate regime.

Businesses that treat SECR as part of a broader reporting and governance strategy, rather than a standalone annual compliance task, will be best placed for what comes next.

Please get in touch if you would like to discuss any aspect of this article or any other legal or commercial issues with our leading team of Environmental experts.

One of the drawbacks for SECR is that it doesn’t mandate any action… people are just treating it as reporting without having to do any actual implementation. (Reporting provider)