Environmental reporting regulations for academies

Published by Phil Reynolds on 14 April 2020

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Away from the continued uncertainty that Coronavirus is bringing to academy trusts, there are also new environmental reporting regulations which have come into force. These apply to financial years commencing on or after 1 April 2019, therefore they will apply for the year ended 31 August 2020 for the first time.

The regulations require large companies which consume more than 40,000kWh of energy in a reporting period to include certain information about energy efficiency measures. Large companies are defined by sections 465-466 of the Companies Act 2006 as companies which meet 2 out of the following 3 criteria:

  • Gross income of £36million or more;
  • Balance sheet assets of £18million or more; and
  • 250 employees or more

The reporting period for academy trusts will be 1 September 2019 to 31 August 2020.

If your academy trust is deemed to be “large” then the information required to be disclosed includes the following:

  • UK energy use (in kWh), to include as a minimum purchased electricity, gas and transport fuel
  • Associated greenhouse gas emissions (in tonnes of carbon dioxide equivalent)
  • At least one ‘intensity ratio’ that expresses the academy trust’s annual emissions in relation to a quantifiable factor associated with its activities
  • Information about energy efficient action taken during the year
  • Methodologies used in the calculation of disclosures

Comparatives of the above information should also be disclosed except where this is the first year of disclosure. The disclosure is to be made in the Trust’s annual trustees’ report.

In assessing whether the 40,000 kWh threshold is met, academy trusts must consider, as a minimum, all the energy from gas, electricity and transport fuel usage they are responsible for. If the threshold is met, yet the trust is not deemed to be large, then no disclosure is required in the trustees’ report. However, disclosure will be required on the Trust’s website by 31 March 2021. If applicable, constituent academies within a trust with multiple academies should include a link on their website to where their information is published on their trust’s website.

Trusts that consume 40,000kWh of energy or less in the UK are not required to include these disclosures provided that the trustees’ report states the reason why this information has not been disclosed. Where it is not practical for Trusts to calculate the required energy usage information, this fact should be reported and it should also explain what steps it is taking to calculate this information in future.

The Government has published guidance on how to approach these new disclosure requirements which is available here.

The ESFA will also be publishing further guidance in the future which may also assist academy trusts with their compliance.

This is a new reporting area for academy trusts and they may face some challenges in building up full information to support the disclosures in the first year. Nonetheless, academy trusts should make a fair attempt to comply with these requirements in full.  It is important that trusts look to compile the information now to avoid complications as the finalisation of the trustees’ report draws near. We would recommend introducing a monthly or quarterly reporting schedule that is compiled by either the finance department or the trust’s site/estates manager.

If you would like to discuss any of the topics explored in this article, contact Phil Reynolds.

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