Webinar: Streamlined Energy and Carbon Reporting (SECR)

November 18, 2019 | Event,
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You must comply with SECR if you are:

  • A quoted company
  • A “large” unquoted company
  • A Limited Liability Partnership (LLP)

Date: Tuesday 10th December 11:00 – 12:00 pm (GMT)
Location: Online Webinar

Streamlined Energy and Carbon Reporting (SECR) is a mandatory reporting scheme that requires qualifying UK companies to prepare and file energy and carbon information in their Directors’ Report.

This webinar will provide an introduction to the SECR regulations, including the wider policy landscape to see how this legislation relates to existing frameworks such as the Energy Savings Opportunity Scheme (ESOS), Mandatory Carbon Reporting and the Task Force on Climate-related Financial Disclosures (TCFD).

This webinar will enable you to:
• Determine whether your company is eligible for SECR.
• Understand the reporting requirements, process, deadlines and penalties for non-compliance for eligible companies.
• Evaluate the routes to compliance.
• Review the legislation in the context of the wider policy landscape.

Agneta Persson

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Ben Lynch

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Tobias Parker

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Heat Network (Metering and Billing) Regulations

September 26, 2019 | Guidance,
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The Heat Network (Metering and Billing) Regulations 2014 (HNMBR), require owners and managers of UK heat networks to notify the Secretary of State about the heat networks they operate, every four years.

In line with the EU Energy Efficiency Directive, the regulations aim to drive energy efficiency and transparency within heat networks, ensuring that customers can monitor their energy use and they are provided with competitively priced energy.

The initial deadline for notification was 31st December 2015, and the process must be repeated every four years from the date of your original submission. The deadline for this round is 31st December 2019, this means many of our clients are due to re-submit details of their heat network this year.

HNMBR is regulated by the Office for Product Safety and Standards (OPSS), part of the Department for Business, Energy and Industrial Strategy (BEIS).

Eligibility

You may need to comply with HNMBR, if you charge for the supply of heating, cooling or hot water to an end customer in the UK, through either of the following:

  • A district heating network – two or more buildings with at least two end-users.
  • A communal heat network – a single building, with two or more end-users, such as an apartment or office block.

Requirement

Part 1 (Required now)

Part 1 of HNMBR is a notification to the BEIS of data from all qualifying heat networks. If you initially submitted by the December 2015 deadline, or you are submitting for the first time, this is due now.

Part 2 (Awaiting release)

Part 2 of HNMBR will be the completion of a technical and financial viability exercise to determine where you must install heat meters or heat cost allocators. Currently, this tool is waiting on release from BEIS, with no launch date set at present. This tool will confirm whether heat meters or cost allocators will need to be installed.

Why Anthesis?

Anthesis has supported BEIS with the regulations from the outset, including presenting alongside them at many HNMBR events.

Our team has significant experience with HNMBR notification, having compliantly notified over 2,400 networks, representing over 15% of all notifications made nationally during round 1. Additionally, we were commissioned by BEIS to design and deliver the database into which all HNMBR notifications are uploaded.

Through our market wide research on the heat meter supply and installation costs, we are ideally placed to support you with notification, as well as providing informed and accurate costings on any required heat meters or heat cost allocators.

 

Explore our dedicated page to learn more.

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Science Based Targets: Part Three, From Ambitions to Reality

August 19, 2019 | Insights,
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In the first two parts of this “Lessons Learned” series, we shared insights for laying a strong foundation as well as practical steps to ensure success in developing science-based targets (SBTs). In this blog we will delve further into the SBT process to uncover some key learnings on the target-setting process, and what it takes to translate noble ambitions to a practical roadmap – from the point of calculating your reduction percentages, through to internal approval, validation and implementation.

Reality check

You have either decided internally to commit to an SBT or perhaps your business has already submitted its letter of commitment to the Science Based Targets Initiative (SBTi) and now you are having second thoughts.

SBTs require a massively aggressive effort on a relatively short planetary times scale but within a relatively long business time scale and the two are mutually exclusive! Given this seemingly impossible prospect, can your business realistically set an SBT and achieve the required reductions within the specified time? It’s a tall order but certainly do-able.

Next steps

Once you have a draft reduction target the lion’s share of the work begins, including:

  • Sharing this draft reduction target with your business’ key decision-makers to gain buy-in. The SBT will require a cross-functional discussion with the top personnel of your organization because it will dictate how cash flows and assets are allocated in the long-term. For example, an SBT for a large Scope 1 emitter will be very expensive and will essentially be a balance sheet exercise, with the primary limitations being asset life and ability to accelerate depreciation to get carbon-heavy facilities off the books earlier than planned, which will rely on excess profitability.
  • Possible refinement to align with your business priorities and then final approval. This process could be relatively straight-forward or could easily consume weeks of effort.

Recommendation: We recommend that you involve your board of directors as well as the strategy team early on in these discussions as they are commonly thinking in the longer time frames, however, timescales for SBTs (>10 years) may still be a stretch.

Noble ambitions can drive change in a company both strategically and culturally. The key is to have realistic expectations.

How to secure buy-in

Successful buy-in is going to require some preparation and will need to be informed by your business’ current climate, culture, politics and strategic positioning. First, we recommend assessing your leadership team’s understanding of the strategic and scientific implications of setting an SBT.

On one end of the spectrum, if there is already top-level support for and/or internal buy-in for an SBT (they believe it is the ‘right thing to do’), then it is a case of moving forward with sharing your draft reduction target, reviewing potential reduction scenarios and discussing potential reduction strategies that fit within the context of your business.

On the other end of this spectrum, if there is a weak approach to climate management, less top-level support, climate change skeptics involved in decision-making, or this kind of goal-setting is simply not part of the organisational DNA, then the approach could be quite different. If any of these factors are the case for your company, we recommend the following preparatory work:

  • Introduction into greenhouse gases and science based targets
  • Details of SBT calculations and their associated methodologies
  • Potential reduction opportunities to show how this target may be achieved
  • Financial implications of said reduction opportunities.

On a final note, ‘sticker-shock’ is a common initial reaction in the internal buy-in process. Thus, you must assemble the right internal stakeholders from the beginning to reduce the time required to move toward validation as well as reduce unnecessary hurdles in the interim.

Move towards validation

Once your internal stakeholders have vetted and approved the draft SBT, you may then move through the process to validate the SBT via SBTi. The SBTi recently published a Target Validation Protocol which provides step-by-step guidance through the target setting process addressing how your target will be assessed as well as any sector-specific requirements.

Noble ambitions

Noble ambitions can drive change in a company both strategically and culturally. The key is to have realistic expectations of what will be required to meet these noble ambitions and understand how to set up your company for success. Setting an SBT is no small effort but it can spur innovation, inspire creativity and catalyze cross-functional collaboration among employees.

With the right approach, the process of working toward an SBT can unite employees behind a common goal or mission that they believe in and increase camaraderie and loyalty to the company. There are many benefits associated with an SBT, and we will delve into these benefits as the topic of our next and final blog in this SBT series.


In the fourth and final installment in this series Kaylee Shalett  and Jono Adams will explore the benefits of a successful SBT process.

To learn more about SBTs, please refer to our page for SBT Essential Resources.

About the authors

Curtis-Harnanan-977x1024

Curtis Harnanan is a principal consultant at Anthesis with 20 years of experience, which spans developing science based targets, enterprise and full value chain carbon footprinting, management and reporting; corporate sustainability strategy, benchmarking and reporting; organizational and product sustainability standards; hotspots analysis, and policy analysis.

 

Kaylee Shalett white background

Kaylee Shalett is a senior consultant at Anthesis and specialises in sustainability strategy, climate resilience planning, greenhouse gas accounting and analysis, sustainability reporting, and setting science based targets. She has developed GHG inventories for over 35 clients with expertise in emissions quantification protocols and best practices for calculating Scope 1, 2, and 3 emissions, leveraging her experience to assist companies in setting their science-based targets.

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What Can Businesses Do to Adapt Strategically as the UK Transforms to Become Zero Carbon?

June 27, 2019 | Insights,
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There has been such a volume of media coverage of climate-related issues over the past few months that it has been hard to keep up with the latest developments. The UK has seen a wave of ‘Climate Emergency’ declarations at both the city and national level. 

This coincided with the release of the Committee on Climate Change’s (CCC) Report ‘Advice on the UK’s long-term climate change targets‘, which set out a pathway for the UK to achieve carbon neutrality by mid-century. Following this, on 27th June, the UK signed into law a ‘Net Zero’ target for 2050.

Public awareness and sentiment around climate change is clearly burgeoning. Display of this range from Greta Thunberg and the school children’s protests, to more civil disobedience such as Extinction Rebellion’s (XR’s) occupation of central London and Greenpeace’s blockade at BP headquarters.

Amongst all the activity, it can be difficult to discern what this means in practice for corporations and what specifically they should do in response. The CCC’s Report, though directed specifically at the UK Government, provides important contextual direction for businesses. Here, we summarise key points made in the CCC’s report and identify three key initiatives from the sustainability strategy and communications world that support strategic, coordinated, and commercially valuable responses to the climate emergency.

Net Zero – The UK’s contribution to stopping global warming (in short) and its implications for businesses strategy

The CCC has provided a roadmap to eliminate net emissions of greenhouse gases by 2050 – significantly upping the current national mitigation trajectory, which aims for 80% by the same date. Importantly, the report demonstrates that this is achievable using known technologies.

However, the report also emphasises that this target is only achievable if clear, stable and well-designed policies to reduce emissions further are introduced across the economy rapidly. In that vein, the report makes a number of key points directed at the UK Government, but which bear significant implications for corporates. Overall, the message is clear – roadmaps are possible, and businesses will increasingly be expected to have one. We summarise the recommendations in more detail and highlight key implications for UK corporates in the table below.

Key report recommendation Recommendation details Key implications for UK corporates
Existing technological interventions are largely capable of delivering net zero These technologies include:

  • low-carbon electricity
  • efficient buildings and low-carbon heating
  • electric vehicles
  • carbon capture and storage
  • diversion of biodegradable waste from landfill
  • phase-out of fluorinated gases
  • increased afforestation
  • agricultural measures
The Report demonstrates that it is possible to develop detailed plans to transition to ‘net zero’ by 2050. Such plans can help mitigate business risk and identify opportunity. Moreover, the ability to do so in a costed, policy-relevant context allows for strong business cases around mitigation to be developed.
Government must address industrial CO2 emissions Specific areas of focus for decarbonisation of industry include:

  • heavy goods vehicles must switch to low-carbon fuel sources
  • emissions from international aviation and shipping must be addressed
  • a significant proportion of current agricultural land must shift to uses aimed at carbon sequestration
  • The shortfall in emissions reductions must be fully offset by removing CO₂ from the atmosphere and permanently sequestering it
Industry should expect government policy intervention to accelerate and encourage decarbonisation, including in transportation at the national and international level. This is likely to present risks and liabilities relating to both direct operations and supply chains. However, it is also likely to present opportunities, for example in the form of competitive advantage, avoided costs, and policy-linked incentives.
Government, industry and communities must work together to deliver decarbonisation Emissions reduction cannot be left to the energy and environment departments or to the Treasury. A joined up approach is vital, involving:

  • every level of government in the UK
  • all sectors of the economy
  • markets and consumers
The pace and scale of decarbonisation will require firms to adapt to a rapidly changing external environment and be cognisant of changing market conditions, consumer sentiment and the policy environment. At the same time, those organisations may be required to transform internal processes. This will require a well developed climate strategy.

Three Commercially Valuable Corporate Initiatives for the Climate Emergency

Streamlined Energy & Carbon Reporting (SECR)

This is a new package of regulations for reporting of energy use and carbon emissions. Launched in April 2019, SECR has replaced the Carbon Reduction Commitment (CRC) scheme, simplifying reporting requirements. Aimed at all ‘large companies’ registered in the UK, the regulations draw an additional 8,000 businesses into mandatory carbon reporting.

While this may seem at first to be an additional burden, the process of data collation and calculation of KPIs associated with reporting provides a number of key benefits. These include:

  • Identifying opportunities for energy cost reductions
  • Increased understanding of exposure to climate change and energy business risks
  • Development/ strengthening of climate leadership and green credentials in the market place.
  • Use of KPIs to highlight the link between environmental and financial performance.
  • Provision of data for suppliers, investors, insurers, etc. who are increasingly using this type of information in their assessments.

Overall, the requirement for reporting energy and carbon data in annual reports will elevate these issues to the boardroom, opening the door for wider conversations around the commercial benefits of carbon mitigation and climate change strategy.

Taskforce for Climate-related Financial Disclosure (TCFD)

Organisations seeking to further develop their assessment and management of climate-related risks and opportunities should consider undertaking a forward-looking analysis of climate risks and opportunities in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

This framework will become increasingly relevant as businesses look to identify and quantify climate risk and opportunity, and to build a robust business case for change. Moreover, the guidance enables companies to establish and develop governance mechanisms, strategies, metrics & targets and external reports through a robust framework developed and piloted under the Financial Stability Board aimed at increasing business resilience and performance in the face of climate change.

While the Task Force strongly encourages disclosure, firms are encouraged to begin undertaking assessments in line with the recommendations regardless of whether they intend to disclose. This will allow them to begin gaining the benefits of a forward-looking analysis while they embark on the learning process associated with the recommendations.

Science Based Targets (SBTs)

With Government policy seeming to coalesce around a decarbonisation pathway that aligns with the latest science, as well as very strong public support for this pathway, it is prudent and highly beneficial for companies to align with those emissions trajectories. As discussed above, it is possible for the UK to reach net zero by 2050 using only existing technologies, and detailed forecasts of reduction pathways at the company level can be made and costed.

As SBT adds stark relevance and context to currently planned initiatives, and more often than not, highlights the extent of the gap companies need to then close.

Next steps

Anthesis has extensive experience in collating, verifying and reporting climate change, energy and environmental information for corporate reports. Moreover, we have worked with a wide range of companies in the UK and beyond to develop and implement climate change mitigation strategy and maximise the impact of reporting activities.

If you have any questions about SECR, or the wider energy and carbon policy landscape and how it affects your business, or to discuss your climate change challenges please contact Fiona:

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Streamlined Energy and Carbon Reporting (SECR)

June 3, 2019 | Guidance,
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Streamlined Energy and Carbon Reporting (SECR) is a mandatory reporting scheme that requires qualifying UK companies to prepare and file energy and carbon information in their Directors’ Report.

SECR came into effect in April 2019 under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 with the intention of streamlining, and as a result simplifying, emissions reporting requirements for qualifying organisations.

For a number of organisations, SECR replaces the Carbon Reduction Commitment (CRC). The scheme also replaces and extends Mandatory Greenhouse Gas Reporting (MGHG), which required quoted companies only to report their annual GHG emissions.

What must be disclosed under SECR?

To comply with SECR, qualifying companies must disclose:

  • Their energy use and greenhouse gas (GHG) emissions for their financial year reporting period
  • At least one intensity ratio
  • The energy efficiency actions taken
  • The methodology used to calculate the required information

Who needs to comply with SECR?

You must comply with SECR if you are:

  • A quoted company
  • A “large” unquoted company or
  • A Limited Liability Partnership (LLP)

Quoted companies are those whose shares can be bought or sold on the stock exchange. A “large” unquoted company is defined as one which satisfies two or more of the following requirements:

  • An annual turnover of £36 million or more
  • A balance sheet total of £18 million or more
  • 250 or more employees

Low energy users

Companies who fit the above criteria but who consume 40MWh or less during the reporting period are not required to disclose energy and carbon information, however they are required to state why it is not being disclosed.

 

To learn more about SECR, join Gemma Tong for a free webinar on Tuesday, 10th December:

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Sustainability Reporting and Brand Communications

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“I’ve worked with several teams and individuals within Anthesis and have been continually impressed by the quality and concerted effort they put into delivering value to our business through our sustainability programs.”

Jaclyn Allen Director of Corporate Sustainability, GUESS?, Inc.

“It was a joy working with Anthesis. They provided a wealth of experience in enabling us to understand the nuances of the metrics so that we could put our best foot forward in our sustainability report. In short, I give Anthesis my highest recommendation as a Corporate Responsibility partner and publisher, and I would not hesitate to work with them again.”

VP Investor Relations, Leading Technology Firm

Anthesis offers pragmatic support for sustainability reporting, helping companies and organisations find value in what can otherwise be a time consuming, complicated and sometimes expensive process.

Benefits of Sustainability Reporting

Every organisation’s needs are different so we offer a wide range of services to help plan, write and design sustainability reports:

  • Identify and understand emerging risks and opportunities that your organization may face, and how those translate into your material topics.
  • Target your communications to the needs of your key stakeholders – employees, investors, customers, NGOs, regulators.
  • Align your report with best practice reporting frameworks including the Global Reporting Initiative Standards, International Integrated Reporting Council, Sustainability Accounting Standards Board, Dow Jones Sustainability Reporting Index), Carbon Disclosure Project, UN Global Compact and others.
  • Create a repository of answers to stakeholders’ questions.
  • Use the reporting process to drive ownership and accountability of sustainability performance into the business, as well as measure performance improvement.
  • Connect your reporting process and focus areas to the business and to commercial strategy.
  • Build and protect your reputation.

Sustainability Reporting Experience

We work with organisations both large and small across the world to help them develop sustainability reporting and communications most relevant for their key stakeholders. Our clients include:

Arista Networks • Bose • Cisco • CMC • Colas • Exponent PE • Guess?, Inc.• Kingfisher • Lindsay Corporation • Maxim Integrated • Melco • Network Rail • Provident Financial • Tesco • The North Face • Urban & Civic • YOOX Net-a-Porter •

For more information contact Ben Tuxworth.

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