Carbon and energy reporting by large privately-owned companies and LLPs

Published by Peter Manser on 4 March 2019

Share this article

Last week the UK saw a new record high temperature for February, with 21.2°C recorded at Kew Gardens in London. Whilst this unseasonal weather was quite welcome, it seems to be an opportune time to write about new energy and carbon reporting requirements that come into force later this year.

For a few years now quoted companies have already been required to include environmental disclosures as part of their annual report. These requirements are now being extended, and for the first time large unquoted companies and LLPs are going to have to provide information on their UK energy use. This move is designed to get more businesses to think about and report upon their energy usage, and ways by which they can improve their energy efficiency.

For companies this disclosure will need to be included as part of the directors’ report, although it can be included as part of the strategic report instead if preferred. The annual report of large LLPs will need to include a new Energy and Carbon Report to incorporate the necessary disclosures.

Usual accounting size limits apply, so those large companies and LLPs that will be required to report are those that satisfy two or more of the following requirements:

  • Annual turnover of £36 million or more
  • Balance sheet total (Gross assets) of £18 million or more
  • 250 or more employees.

The Government is also encouraging smaller organisations to include similar disclosures on a voluntary basis, so even if you are not caught by these requirements due to your size you should consider whether you should still include disclosure in order to meet the information needs of the entity’s stakeholders.

There are special rules in place for groups. Parent undertakings should prepare their disclosures on a consolidated basis, but have the option of excluding any energy and carbon information relating to a subsidiary which the subsidiary would not itself be obliged to include if reporting on its own account. Subsidiaries that are themselves large will not have to include disclosures in their own accounts provided that they are included in the group report.

The following information will need to be disclosed:

  • UK energy use, to include as a minimum purchased electricity, gas and transport;
  • Associated greenhouse gas emissions;
  • At least one ‘intensity ratio’ that measures energy usage compared with an appropriate business metric such as turnover or staff numbers;
  • Information about energy efficiency measures undertaken during the year; and
  • Methodologies used in calculating the disclosures.

Usually comparative information will have to be presented, but this is not required in the first year.

There are some large entities that will be exempt from having to include this disclosure. Those which have consumed 40MWh of energy or less in the UK, including offshore area, will not be required to make the disclosures. They will still need to monitor their energy usage though, in order to know whether they are exempt from having to make the disclosure or not.

Entities will also be able to avoid making the disclosure if they believe it to be seriously prejudicial to the interests of the organisation. Businesses are encouraged to rely on this only in exceptional circumstances and will be required to state the reason for non-disclosure in the annual report. Additionally, entities will not be required to disclose when energy and carbon information is not practical to obtain. Again, the annual report will be required to state why the information is not being disclosed.

These regulations come into effect for financial periods beginning on or after 1 April 2019. Those businesses that are required to, or choose voluntarily to, report on environmental issues will need to be thinking now on how they are going to collate the information necessary to make the required disclosures.

The Government has published detailed guidance on how to go about ensuring that your business complies with these reporting obligations that can be downloaded free of charge.

If you have any questions regarding these new energy reporting obligations please contact your usual Kreston Reeves adviser.

Join over 8000 businesses and individuals who receive our complimentary e-bulletins by signing up here.

Share this article

Close

Email Peter

    • yes I have read the privacy notice and am happy for Kreston Reeves to use my information

    View teamSubscribe

    Close Expand

    Subscribe to our newsletters

    Our complimentary newsletters and event invitations are designed to provide you with regular updates, insight and guidance.

      • Business, finance and tax issuesPersonal finance, tax, legal and wealth management issuesInternational business issuesCharity and not-for-profit issues
      • Academies and educationAgricultureFinancial servicesLife sciencesManufacturingProfessional practicesProperty and constructionTechnology
      • yes I agree I have read and accept the privacy policy and am happy for Kreston Reeves email communications I have selected above





      You can unsubscribe from our email communications at any time by emailing datateam@krestonreeves.com or by clicking the 'unsubscribe' link found on all our email newsletters and event invitations.