The Accountant's Guide to Carbon Reporting: SECR, UK SRS, and What Your Clients Actually Need

Carbon reporting has landed on the accountant’s desk. What was a specialist sustainability function two years ago is now a data collection, compliance, and disclosure exercise — and the people expected to deliver it are finance professionals, not environmental consultants. If you are an accountant advising SME clients and feeling unprepared, you are not alone. But the task is more tractable than it looks.

Why carbon reporting is now an accounting function

Three forces are converging.

First, SECR reporting requires disclosure in the directors’ report — the same document your practice already prepares. The data sits alongside financial statements, and auditors are asking whether the energy and emissions figures are consistent with the financial data they can see. An accountant who prepares the financials but cannot explain the carbon numbers has a credibility gap.

Second, UK SRS S1 and S2 — available for voluntary use since February 2026 — explicitly integrate sustainability disclosure with financial reporting. The FCA proposes mandatory UK SRS S2 climate disclosures for listed companies from January 2027. Sustainability data is not a separate report any more. It is part of the financial narrative.

Third, procurement pressure is rolling down supply chains. Your SME clients are receiving carbon data requests from their customers. Those requests ask for numbers that look like accounting outputs: energy consumption by source, emissions by scope, year-on-year changes with explanations.

The question your clients are asking is not “should we hire a sustainability consultant?” It is “can you add this to what you already do for us?”

Which framework applies to which client

The framework question is simpler than it looks. There are three scenarios for UK SMEs:

SECR-obligated: Your client meets at least two of: turnover above £36 million, balance sheet above £18 million, or more than 250 employees. They must disclose energy use and carbon emissions in their directors’ report. Use the SECR guidance on GOV.UK and DESNZ conversion factors.

Supply-chain obligated: Your client is below the SECR thresholds but has customers — particularly in EU supply chains — asking for carbon data. They are not legally required to report, but commercially they need to produce numbers. The VSME standard (consultation closing 3 June 2026) will become the template for these requests.

Voluntarily reporting: Your client wants to measure and report for commercial reasons — B Corp certification, net zero commitments, tender requirements, or customer expectations. No specific framework is mandatory; GHG Protocol is the standard methodology.

Tip: Check the Companies Act thresholds carefully. The “large company” thresholds were raised in April 2025, but SECR thresholds in the 2018 Regulations were not updated. Some clients may have dropped out of Companies Act “large” status while remaining in scope for SECR.

What data you actually need to collect

Carbon reporting for an SME involves five data categories. All of them are available from sources accountants already have access to.

Electricity consumption: kWh from electricity bills or supplier data. Most SMEs have one or two electricity meters. Ask for 12 months of bills or request an annual consumption summary from the supplier.

Gas consumption: kWh from gas bills. Same process as electricity. If the client has no gas supply, record zero — do not skip the data point.

Transport fuel: Litres of petrol, diesel, or other fuel purchased for company vehicles. Fuel card statements or expense claims. For electric vehicles, record the kWh charged at company premises separately.

Business travel: Kilometres or miles for flights, rail, and employee mileage claims. Expense systems typically capture this. Flights need to be categorised by haul (domestic, short-haul, long-haul).

Other fuels and refrigerants: LPG, oil, and refrigerant top-ups if applicable. These are often small for service-sector SMEs but material for manufacturing or food businesses.

The conversion from consumption data to CO₂e emissions uses the annual DESNZ conversion factors. The calculation is straightforward: activity data multiplied by the relevant factor.

Software vs. consultant: when to use which

Use software when: The client has relatively simple operations (office-based, service sector, few emission sources), the data collection can be done from utility bills and expense reports, and the client or your practice can handle the initial data entry. Software handles the factor lookups, calculations, and report formatting. Most SMEs can complete a first carbon footprint in a few hours with the right tool.

Use a consultant when: The client has complex manufacturing processes, significant Scope 3 requirements (multiple supply chain tiers), bespoke emission sources not covered by standard DESNZ factors, or needs strategic advice on reduction targets and net zero pathways. A consultant adds value when the methodology decisions are non-obvious.

Use both when: The client needs ongoing reporting (annual SECR, quarterly updates for customers) but has an initial setup that requires specialist input. A consultant can configure the methodology and factor selections, and then software handles the recurring data collection and calculations.

If you are an accounting practice advising multiple SME clients, the economics favour software. Setting up each client as a separate account, collecting data from bills you already receive, and producing the report from the same system scales in a way that manual spreadsheet work does not.

Three mistakes accountants make with carbon data

Using the wrong year’s conversion factors. DESNZ publishes new factors annually, usually in June. The factors are not interchangeable — using 2024 factors for a 2025 reporting period will produce incorrect results. Check which factor set applies to your client’s financial year.

Ignoring Scope 3 when the client’s customers ask for it. SECR does not require Scope 3 disclosure. But if your client’s customer sends a supplier questionnaire asking for upstream emissions, “we only report Scope 1 and 2” is not a useful answer. Understand which Scope 3 categories are material and whether your client needs to estimate them.

Treating carbon reporting as a one-off. The value of carbon data compounds over time. Year one is the baseline. Year two shows trends. By year three, you have a dataset that supports procurement conversations, tender responses, and reduction targets. Set up the data collection as a recurring process, not an annual scramble.

How CYF helps

If you are working with a sustainability consultant, they may already use CYF — it is designed to let consultants manage multiple client accounts from one dashboard. For accounting practices, the same model works: set up each client, input their energy and transport data, and produce SECR-ready reports.

CYF is built around UK frameworks — DEFRA/DESNZ conversion factors, SECR reporting requirements, and UK SRS data fields — rather than adapted from US or enterprise tools. The benchmark dataset lets your clients see how their emissions compare to similar businesses, which gives the data commercial context beyond compliance.

Book a practice demo to see how CYF works for multi-client accounting practices.

Methodology guidance from Alice Roberts, Head of Methodology at Compare Your Footprint.