Am I still in scope for SECR? The threshold trap explained

The Companies Act definition of a “large company” changed in April 2025. The SECR reporting thresholds didn’t. The two have now formally decoupled — and businesses near the boundary are caught in the gap.

The threshold decoupling: what happened

The Streamlined Energy and Carbon Reporting (SECR) regulations were introduced in 2018 and tied to the Companies Act 2006 definition of a “large” company. At the time, the thresholds aligned: if the Companies Act said you were large, SECR said you had to report.

In April 2025, the Companies Act thresholds were uplifted — increasing the turnover and balance sheet figures that define a “large” company. But the SECR regulations, set out in the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, were not updated to match.

The result: a company that no longer qualifies as “large” under the Companies Act may still meet the original SECR thresholds. It thinks it’s exempt. It isn’t.

Who must report under SECR: the actual thresholds

A UK company must include SECR disclosures in its directors’ report if it meets at least two of these three criteria in the relevant financial year:

1. Turnover: £36 million or more

2. Balance sheet total: £18 million or more

3. Number of employees: 250 or more

These are the SECR-specific thresholds from the 2018 Regulations. If your company crossed below the Companies Act “large” threshold after April 2025 but still meets two of the three SECR criteria above, you are still in scope.

Quoted companies, large LLPs, and large unquoted companies each have slightly different SECR requirements, but the threshold test above is the gateway for all of them.

Three scenarios where the trap catches businesses

Scenario 1: Turnover dropped, headcount didn’t.

A manufacturing firm had £40M turnover in 2023 but dropped to £34M in 2025. It no longer meets the turnover threshold, but with 280 employees and a £22M balance sheet, it still hits two of three SECR criteria. It must report.

Scenario 2: New Companies Act thresholds create a false sense of exemption.

A services company checked its status against the new Companies Act thresholds and concluded it’s no longer “large.” It stopped preparing SECR disclosures. But the SECR thresholds haven’t changed — and the company still qualifies. It’s now non-compliant.

Scenario 3: Group company boundary confusion.

A subsidiary sits below the SECR thresholds individually, but its parent is in scope. The parent must consolidate energy and carbon data from qualifying subsidiaries. The subsidiary isn’t exempt just because it’s small — its data still needs to flow up.

A simple decision flowchart

Ask these questions in order:

Step 1: Does your company (or group) meet at least two of: £36M+ turnover, £18M+ balance sheet, 250+ employees — using the SECR 2018 thresholds, not the Companies Act 2025 thresholds?

• If yes → you are in scope for SECR. Proceed to Step 2.
• If no → you are not in scope for SECR under the 2018 Regulations. But check whether your customers are requiring carbon data under UK SRS or CSRD supply chain provisions — voluntary reporting may still be commercially necessary.

Step 2: Are you a quoted company, large unquoted company, or large LLP?

• Quoted companies must report Scope 1, 2, and 3 emissions, plus an intensity ratio and methodology narrative.
• Large unquoted companies and LLPs must report Scope 1 and 2 emissions, total energy consumption, an intensity ratio, and a narrative on energy efficiency actions.

Step 3: Is your financial year end approaching within six months? If yes, start collecting energy consumption data now. SECR disclosures must appear in the directors’ report filed at Companies House.

What the DESNZ evaluation tells us about SECR’s future

The DESNZ SECR Evaluation Report, published in January 2026, found that SECR delivers £2.72 of benefit per £1 of compliance cost — a total of £8.1 billion in benefits against £3.0 billion in costs from 2019 to 2025. 79% of businesses said SECR put more energy and carbon data into the public domain than they would have published otherwise.

But the report also signals change. With UK SRS S2 (climate disclosures) becoming mandatory from January 2027 for listed companies, the government has committed to reviewing SECR to reduce “unnecessary duplication.” The widely held interpretation: SECR will be gradually phased out as UK SRS takes over.

That doesn’t mean you can stop reporting now. Until SECR is formally amended or revoked, the 2018 thresholds apply. Any company in scope must continue to comply.

How CYF helps

Compare Your Footprint is built around UK SECR and DEFRA/DESNZ frameworks. The platform collects the exact data fields required for SECR disclosures — Scope 1, Scope 2, total energy consumption, and intensity ratios — and generates a summary suitable for inclusion in a directors’ report. CYF’s benchmark dataset also lets you compare your energy and carbon performance against sector peers, adding context to the raw numbers.

If you’re working with a sustainability consultant, they may already use CYF — it’s designed to let consultants manage multiple client accounts from one dashboard.

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

Not sure whether you’re in scope? Start a free assessment and we’ll walk you through the thresholds.