Legal & Regulatory News

UK Government consults on Scope 3 emissions reporting and the future of the SECR regime

On 19 October 2023, the UK Government initiated a call for evidence on the benefits, costs and practicalities of Scope 3 greenhouse gas (GHG) emissions reporting in the UK. The Greenhouse Gas Protocol defines Scope 3 GHG emissions as all indirect emissions, not included in Scope 2, that occur in the value chain of the reporting company. Scope 3 is increasingly important for investment decisions, since it enables investors to gain a more comprehensive understanding of climate risks, however, it also increases the burden on companies in terms of data collection and reporting.

The call for evidence will help inform the UK Government’s post-implementation review of the Streamlined Energy and Carbon Reporting framework (SECR) which was first implemented in 2019. The purpose of the SECR is to encourage the adoption of energy efficiency measures. Under the current SECR framework, most Scope 3 disclosures are voluntary except for a small subset of large companies. The call for evidence also incorporates a request for feedback on the existing SECR.

The responses to the call to evidence may also be used by the Technical Advisory Committee (TAC) to help inform its assessment of the suitability of the International Sustainability Standard Board’s standard, IFRS S2, for use in the UK. Under IFRS S2 companies are required to report on Scope 1, 2 and 3 GHG emissions as categorised by the Greenhouse Gas Protocol. The TAC will consider the appropriateness of this requirement as part of its assessment.

Click here to read the call for evidence.

Click here to read the press release.