Carbon reporting continues to evolve across the UK, with organisations facing growing expectations to provide accurate, transparent and evidence-based information about their environmental performance.
For businesses preparing for carbon reporting in 2027, the focus should not simply be on meeting individual reporting deadlines. Building robust data, reporting processes and governance now can help organisations respond more effectively as requirements and stakeholder expectations develop.
Understand Your Existing Carbon Reporting Requirements
The first step is understanding which existing requirements apply to your organisation. Under the Streamlined Energy and Carbon Reporting (SECR) framework, quoted companies are required to report, while large unquoted companies and LLPs generally fall within scope if they meet at least two of the following criteria: more than 250 employees, annual turnover of more than £36 million, or a balance sheet total of more than £18 million. Organisations within scope must disclose relevant energy use and greenhouse gas emissions information through their annual reporting.
Businesses should also consider ESOS (Energy Savings Opportunity Scheme). While primarily an energy assessment scheme rather than a carbon reporting framework, ESOS is closely connected to energy efficiency and decarbonisation. Phase 4 has a qualification date of 31 December 2026, with qualifying organisations required to submit their notification of compliance by 5 December 2027. Phase 4 also places greater emphasis on progress against previously identified energy-saving actions.
Another important development for 2027 is the introduction of the UK Carbon Border Adjustment Mechanism (CBAM). From 1 January 2027, CBAM will place a carbon price on emissions embodied in specified imported goods from the aluminium, cement, fertiliser, hydrogen, iron and steel sectors. Businesses importing affected goods will need to understand their obligations, maintain appropriate records and have access to reliable emissions information associated with those products.
With different carbon, energy and sustainability requirements developing in parallel, organisations should understand which frameworks apply to them and ensure they have the data and processes in place to meet their obligations.
Prepare for UK Sustainability Reporting Standards
Another development to watch is the UK Sustainability Reporting Standards (UK SRS) – the UK-endorsed version of the global ISSB sustainability disclosure standards. They are intended to provide a consistent framework for reporting sustainability-related financial information, including climate-related risks and opportunities.
The Financial Conduct Authority (FCA) has consulted on replacing its existing TCFD-aligned disclosure rules for specified listed companies with requirements aligned to UK SRS. Under the proposals, the new rules would come into force from 1 January 2027, although the final requirements are not yet confirmed, with the FCA’s Policy Statement expected in autumn 2026.
For many businesses, the impact could therefore be indirect. Listed customers preparing sustainability disclosures may increasingly require reliable emissions information from suppliers to help understand and report emissions across their value chains. While the FCA has proposed that Scope 3 reporting remains on a ‘comply or explain’ basis, having accurate and accessible carbon data could make it easier for suppliers to respond to growing customer information requests.
Improve the Quality of Carbon Data
Regardless of which reporting frameworks apply, reliable carbon reporting starts with reliable data.
Organisations should review how information relating to energy consumption, fuels, transport, business travel, purchased goods and other relevant activities is collected and managed.
Creating an effective audit trail is important. Businesses should be able to understand where data originated, which emission factors were used, what assumptions were made and how the final carbon figures were calculated.
Consider Independent Verification
As carbon and sustainability information becomes increasingly important to investors, customers and other stakeholders, organisations should also consider the credibility of the information they publish.
Independent verification can provide additional confidence that greenhouse gas information has been calculated using appropriate methodologies and is supported by sufficient evidence.
The UK government has also been developing an oversight regime for sustainability assurance providers, reflecting the growing importance of trustworthy sustainability-related financial information.
Move Beyond Reporting Towards Reduction
Effective carbon reporting should ultimately provide more than a set of figures for an annual report.
A robust carbon footprint can help an organisation identify its largest sources of emissions, establish priorities and develop practical carbon reduction measures. Tracking these figures consistently then allows progress to be measured against an established baseline.
As 2027 approaches, organisations should consider whether their reporting processes provide the insight needed to support meaningful action, rather than treating carbon reporting purely as a compliance exercise.
Preparing for Carbon Reporting in 2027
The UK carbon reporting landscape will continue to develop, but businesses do not need to wait for new requirements before improving their approach.
Reviewing reporting obligations, strengthening data collection, establishing consistent methodologies and considering independent verification can all help organisations prepare for greater scrutiny of sustainability information.
At TEST Consulting, we support organisations with carbon footprinting, carbon reduction planning, verification and wider sustainability reporting, providing independent, evidence-led expertise to help businesses understand their emissions and make informed decisions.
Speak to TEST about preparing your organisation for carbon reporting in 2027:
Tel: 0113 467 7650
Email: enquiries@test-consulting.co.uk
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