Compare Your Footprint — Carbon Intelligence Platform

In January 2026, DESNZ published its statutory post-implementation review of the Streamlined Energy and Carbon Reporting (SECR) regulations. The headline figure: SECR delivers £2.72 of economic and environmental benefit for every £1 spent on compliance.

Buried in the same report is a less comfortable finding: SECR’s impact on actual energy use and emissions peaked in 2021 and has been declining since. For SMEs, that combination of strong ROI and weakening impact has clear implications for how you approach carbon reporting over the next few years.

The commercial case just got a government stamp

The SECR evaluation 2026 review covers the period from SECR’s introduction in April 2019 through to 2025. The numbers are significant for any SME questioning whether carbon measurement is worth the effort.

DESNZ calculated total benefits of £8.1 billion against costs of £3.0 billion over the review period. That £2.72 return on every £1 spent is not an industry estimate — it’s the government’s own cost-benefit analysis, based on actual compliance data from thousands of UK businesses.

The review also found that 79% of businesses subject to SECR now put more energy and carbon data into the public domain than they would have done without the regulation. Before SECR, most companies treated energy consumption as a facilities management detail. SECR turned it into a board-level disclosure.

For SMEs, this matters commercially. When a customer or procurement team asks why you should measure your carbon footprint, the answer is no longer theoretical. The government has quantified the return.

Five practical takeaways from the evaluation

1. Compliance is not the expensive burden businesses feared

The cost-benefit ratio demonstrates that most businesses — including those that initially saw SECR as a box-ticking exercise — found tangible financial value through energy efficiency improvements identified during the reporting process.

For SMEs, this means:

The time and money spent on data collection and reporting can be justified as an investment in cost savings, not just a regulatory overhead.
Energy and carbon data can highlight quick-win efficiency projects (lighting, HVAC, fleet, process optimisation) that pay back faster than expected.

2. SECR’s behavioural impact has plateaued

The review found that SECR drove significant changes in energy management during its first two years, but the effect has flattened. Companies that were going to act on their SECR data have already done so. The regulation alone is no longer pushing further improvements.

Implication for SMEs:

Simply complying once a year is unlikely to unlock new savings.
To keep finding value, you need to embed energy and carbon data into ongoing decision-making — not just into the annual directors’ report.

3. 79% of businesses disclose more data than they would voluntarily

The evaluation confirms that without regulation, most companies would not measure and publish energy and carbon data. For SMEs not yet in SECR scope, this means voluntary measurement still puts you ahead of most peers.

If you’re below the thresholds but supply to larger organisations, this is a chance to:

Differentiate yourself in tenders with credible, transparent emissions data.
Build internal capability before reporting becomes a customer expectation.

4. SECR and Companies Act thresholds have decoupled

The evaluation confirmed that the 2018 SECR thresholds remain unchanged even though the Companies Act “large company” thresholds were uplifted in April 2025.

Some businesses believe they’ve dropped out of scope when they haven’t. If you’re near the boundary — £36M turnover, £18M balance sheet, 250 employees — check your status carefully against the original SECR criteria, not just the updated Companies Act thresholds.

For SMEs close to these limits:

Don’t assume a change in your Companies Act status automatically changes your SECR obligations.
If in doubt, seek professional advice or confirm with your company secretary or auditor.

5. The government is already looking at what replaces SECR

The evaluation explicitly references the need to reduce “unnecessary duplication” between SECR and the incoming UK Sustainability Reporting Standards (UK SRS).

The direction of travel is clear:

SECR is the foundation, not the finish line.
Future frameworks will expect broader climate and sustainability disclosures, with more emphasis on value chain (Scope 3) emissions and transition planning.

Why SECR alone is no longer enough

The FCA’s consultation paper CP26/5 (published January 2026) proposes mandatory UK SRS S2 climate disclosures for listed companies from 1 January 2027. Scope 3 emissions reporting follows on a comply-or-explain basis from 2028.

This is the connection the SECR evaluation doesn’t make explicitly, but SMEs need to understand: when listed companies begin mandatory Scope 3 reporting, they will need emissions data from their supply chains. That means data requests flowing down to suppliers — many of whom are SMEs.

SECR requires Scope 1 and 2 reporting (direct emissions and purchased electricity). UK SRS Scope 3 requirements demand far richer data, including:

Purchased goods and services
Upstream transport and distribution
Business travel and employee commuting
Waste generated in operations
Use of sold products (for some sectors)

An SME that has only ever measured what SECR requires will not have the data its customers need under UK SRS.

What your business should do now

The SECR evaluation confirms that measurement pays for itself. The UK SRS timeline confirms that demand for supplier carbon data will increase sharply from late 2026. The practical steps are straightforward.

If you’re already reporting under SECR

Build on what you have rather than starting again:

Extend beyond Scope 1 and 2: Begin collecting data on business travel, waste, water, and purchased goods — the categories most commonly requested in supply chain questionnaires.
Tighten data quality: Move from estimates and spreadsheets towards more granular, verifiable data that can withstand customer scrutiny.
Align formats: Structure your data so it can be easily reused in SECR, tender responses, and future UK SRS-aligned questionnaires.

You already have the processes in place; you’re adding data fields, not starting from scratch.

If you’re below SECR thresholds but supplying to larger companies

Use voluntary measurement as a strategic move:

Start with energy, fuel, and business travel — the easiest data to access and often the biggest sources of emissions.
Document your methodology and assumptions so you can show customers how your numbers were calculated.
Treat early measurement as a way to identify cost savings and to be ready when procurement teams start scoring suppliers on carbon data quality.

The 67% of SMEs in the Willow Review that reported reduced operational costs from sustainability measures didn’t wait for a legal mandate.

If you’re an accountant or consultant advising SMEs

The evaluation validates the cost-benefit case for recommending carbon measurement to clients:

Use the £2.72 ROI figure to answer the “is it worth it?” question directly.
Position carbon measurement as part of financial risk management and cost control, not just ESG.
Help clients design simple, repeatable data collection processes that can scale from SECR-style reporting to broader UK SRS-aligned disclosures.

How CYF helps

Compare Your Footprint is built around the UK frameworks that matter here — DEFRA/DESNZ conversion factors, SECR reporting fields, and the data categories that UK SRS supply chain questionnaires will require.

The platform produces output that maps to both SECR directors’ report requirements and the richer data fields incoming under UK SRS. CYF’s benchmark dataset lets you compare your emissions against sector peers, so you’re not just reporting numbers — you’re understanding where you stand.

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

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