Compare Your Footprint — Carbon Intelligence Platform

DESNZ’s January 2026 evaluation of SECR confirmed two things. First, the regulation works: it delivered £2.72 of economic and environmental benefit for every £1 spent on compliance, and 25% of businesses credited SECR alone as the catalyst for reducing energy use.

Second, the impact is “diminishing over time” — 2021 was peak year for reductions, and the gains have flattened since. SECR did its job. Now the UK is moving to something more demanding.

The commercial trigger: UK SRS from January 2027

The FCA’s consultation paper CP26/5, published on 30 January 2026, proposed replacing the current TCFD-aligned disclosure regime with mandatory UK Sustainability Reporting Standards (UK SRS) for listed companies. The consultation closed on 20 March. The FCA’s policy statement is expected in autumn 2026, with mandatory reporting from 1 January 2027.

This matters for SMEs because UK SRS S2 includes Scope 3 — supply chain emissions. Listed companies will need to report their Scope 3 data on a “comply or explain” basis, with one year of transitional relief. That means every SME in a listed company’s supply chain is about to receive a carbon data request that’s backed by regulation, not goodwill.

What changes from SECR to UK SRS

SECR applies to large UK companies and LLPs meeting specific thresholds (turnover >£36m, balance sheet >£18m, >250 employees). It requires disclosure of energy use, associated GHG emissions, and an intensity ratio in the directors’ report. The reporting boundary is the company itself.

UK SRS extends this in three critical ways:

1. Scope 3 enters the frame

SECR covers Scope 1 and 2 — direct emissions and purchased electricity. UK SRS S2 adds Scope 3, which means listed companies must account for emissions across their value chain. This is the mechanism that converts supply chain carbon data requests from optional to regulatory.

For SMEs, that means:

Customer questionnaires will ask for Scope 1, 2 and relevant Scope 3 categories.
You’ll be asked to separate activity data (kWh, litres, miles, kg) from emission factors.
You may be asked to evidence methodologies and data sources.

2. Assurance becomes mandatory

Under ISSA (UK) 5000, sustainability disclosures will be subject to independent assurance. The data quality bar rises — estimated figures and unsourced factors will face scrutiny.

In practice, this means:

Using current DESNZ conversion factors and documenting the year.
Keeping audit trails for how numbers were calculated.
Reducing reliance on purely spend-based estimates where activity data is available.

3. Alignment with global standards

UK SRS is based on the ISSB’s IFRS S1 and S2, creating consistency with international disclosure frameworks. For SMEs with both UK and EU customers, this means carbon data produced for one framework is broadly reusable for another (for example, CSRD-aligned requests), as long as you:

Map your scopes and categories clearly.
Keep reporting years and factor sets aligned.
Maintain documentation that can be shared across customers.

What this means for SMEs who aren’t directly covered

If your business falls below the SECR thresholds, you might think this doesn’t affect you. It does — through your customers.

A Sage/ICC report found that supply chains are responsible for up to 95% of corporate emissions. When a listed company calculates its Scope 3, your emissions are their emissions. They need your data to meet their obligations.

The practical sequence is predictable:

The FCA policy statement lands in autumn 2026.
Listed companies start preparing their UK SRS S1 and S2 disclosures.
Procurement teams issue carbon data questionnaires to suppliers.
SMEs receive requests they haven’t seen before — asking for emissions data in specific formats, with specific factor references, covering specific scopes.

The businesses that have already measured will respond within days. The businesses that haven’t will scramble — or lose the contract.

To avoid that scramble, SMEs should aim to have by mid‑2026:

A baseline footprint for at least one full financial year.
A simple data collection template for energy, travel, and key purchased goods/services.
A named internal owner (often finance or operations) for carbon data requests.

Going beyond compliance: the ROI case

The SECR evaluation’s diminishing-returns finding isn’t a failure — it’s a signal that basic measurement has been done and further gains require more sophisticated action. Businesses that treated SECR as a tick-box exercise got initial savings from awareness effects (switching off lights, optimising heating schedules) but have hit a ceiling.

The next stage of carbon reduction requires understanding where emissions come from in detail — not just “our total is X tonnes.” That means:

Activity-based measurement rather than purely spend-based estimates.
Sector-level benchmarking to identify where you’re above average.
Targeted reduction plans focused on the highest-impact areas.

According to Aldermore’s Green SME Index, SMEs estimate £52,198 in additional annual income from demonstrating green credentials. Combined with the SECR evaluation’s £2.72:£1 ROI, the commercial case for moving beyond basic compliance is concrete.

Common mistakes in the SECR-to-UK-SRS transition

1. Assuming Scope 3 doesn’t apply to you

Scope 3 applies to your customer — and your data is part of their Scope 3. The request is coming whether or not you fall within reporting thresholds yourself.

What to do instead:

Identify your largest customers and check whether they are listed or in scope of UK SRS.
Ask your account or procurement contacts what carbon data they expect to request from 2027.
Prioritise measurement for emissions linked to those contracts.

2. Using outdated conversion factors

The 2025 DESNZ factors are current, and the 2026 edition is due in June. Match the factor year to the reporting year. Assurance providers will check this.

What to do instead:

Fix a reporting year (e.g. your financial year) and always use the matching factor set.
Record the factor source, version and download date in your methodology notes.
Update your calculations when new factors are released for future years, not retrospectively unless requested.

3. Treating carbon reporting as a one-off exercise

SECR is annual. UK SRS is annual. Your customer’s Scope 3 request will recur. Building a repeatable measurement process now saves increasing amounts of time each year.

What to do instead:

Create a simple data calendar (e.g. meter reads, fuel purchases, travel exports) aligned to your year-end.
Store all supporting data in a single shared location with clear naming.
Use a tool that can roll forward last year’s structure, so each cycle is an update, not a rebuild.

How CYF helps

CYF is built for UK SMEs making this transition. It:

Uses the current DESNZ conversion factors and updates when new sets are released.
Produces output aligned to SECR and UK SRS S2 data requirements, including scopes and categories.
Provides benchmark data so you can see how your emissions compare to other businesses in your sector.
Stores your methodology and assumptions so you can respond consistently to multiple customer requests.

Most SMEs complete their first carbon footprint in CYF within a few hours — no sustainability team required.

Get ahead of your customer’s next carbon data request — try CYF free or read our SECR reporting guide.