As environmental reporting standards tighten and stakeholder expectations rise, carbon reporting is becoming a critical requirement for UK businesses of all sizes.
Whether driven by regulation, investor scrutiny, or customer demand, accurate carbon reporting helps organisations understand, track, and reduce their greenhouse gas (GHG) emissions.
In 2026, several frameworks and requirements are shaping how UK businesses measure and disclose their carbon impact.
This guide outlines the key carbon reporting requirements in the UK, what emissions you need to account for, and how to prepare for compliance with confidence.
What Is Carbon Reporting?
Carbon reporting is the systematic disclosure of an organisation’s greenhouse gas emissions. It typically includes emissions from electricity consumption, fuel use, supply chains, and other operational activities.
Accurate carbon reporting supports net-zero strategies, improves transparency, and ensures compliance with regulatory frameworks such as SECR and ISSB-aligned standards.
Mandatory Carbon Reporting in the UK: SECR
One of the most important frameworks for UK businesses is the Streamlined Energy and Carbon Reporting(SECR) regulation.
Who must report?
UK-incorporated companies and LLPs that meet two or more of the following criteria:
- Turnover of £36 million or more
- Balance sheet total of £18 million or more
- 250 or more employees
Under SECR, qualifying organisations must include carbon emissions data in their annual reports alongside energy use. This includes Scope 1 and Scope 2 emissions, and for many, an estimate of Scope 3 emissions (such as business travel and employee commuting).
What does SECR require?
- Total energy use (kWh) from electricity and fuel
- Associated Scope 1 and Scope 2 emissions (tonnes CO₂e)
- An intensity metric (emissions relative to output)
- Narrative on energy efficiency actions taken during the reporting year
SECR reporting must be transparent, consistent year-to-year, and accompanied by commentary explaining methodology and reduction efforts.
Emerging International Standards: ISSB & IFRS
As global reporting standards evolve, many UK businesses are also preparing for frameworks developed by the International Sustainability Standards Board (ISSB). While not yet mandatory for all companies, ISSB standards are rapidly gaining traction among investors and multinational organisations.
The ISSB’s approach aligns with IFRS S1 and S2, which focus on climate-related disclosures, including:
- Governance of climate risk
- Strategy and scenario analysis
- Metrics and targets
- Detailed carbon emissions data (Scope 1, 2, and material Scope 3)
For UK businesses with international stakeholders or listed entities, aligning reporting with ISSB standards improves comparability and investor confidence.
Understanding Emission Scopes
Accurate carbon reporting depends on understanding the three GHG Protocol emission scopes:
- Scope 1 (Direct emissions): Emissions from sources owned or controlled by the business (e.g., boilers, company vehicles).
- Scope 2 (Indirect energy emissions): Emissions from purchased electricity, heat, or steam.
- Scope 3 (Value chain emissions): Indirect emissions that occur outside your direct operations (e.g., supply chain, employee travel).
In 2026, reporting Scope 1 and Scope 2 is common under SECR and ISSB. However, Scope 3 is increasingly important for stakeholders and may soon be mandated for larger organisations under expanded frameworks.
Carbon Reporting Deadlines and Best Practice
Carbon reporting is typically aligned with a business’s financial year, and disclosures are published in annual reports. Common deadlines include:
- SECR: Submitted with statutory accounts
- ESOS (Energy Savings Opportunity Scheme): Every four years (affects larger energy users)
- ISSB / IFRS-aligned reporting: As required by investors or future regulation
Best practice tips:
- Start with accurate data collection early: Real-time metering and automated tracking improve quality.
- Document methodology: Clear explanations build credibility and support audits.
- Use intensity metrics: Ratios (e.g., tCO₂e per revenue or per employee) make year-on-year comparisons meaningful.
- Plan for Scope 3: Even if not currently mandatory, early ambition positions you ahead of regulatory change.
Why Carbon Reporting Matters for UK Businesses
Carbon reporting is more than a regulatory requirement. It supports:
- Better decision-making: Data highlights inefficiencies and decarbonisation opportunities.
- Investor and customer trust: Transparent reporting builds credibility.
- Net zero progress: Measurement is essential for meaningful reduction targets.
- Risk management: Understanding emissions exposure reduces future vulnerabilities.
Getting Started with Carbon Reporting
Many businesses struggle with carbon accounting due to fragmented data and inconsistent methods. That’s where expert support adds value.
At TEST Consulting, we help UK organisations with carbon footprint calculations, SECR reporting, Scope 3 assessments, and net zero strategy development, ensuring compliance and confidence.
Find out more about working with our expert team:
Tel: 0113 467 7650
Related Articles
Looking for more insights? Check out these related posts that delve deeper into similar topics.
