Whilst this is clearly challenging for businesses, the most pro-active of organisations can leverage insight from their SECR report to inform their strategy for carbon reduction and sustainability. These organisations won’t just comply with SECR, they will go above and beyond mandatory requirements and turn compliance into opportunity and seize the opportunities; from lowering costs, to building operational longevity, securing long-terms investments, and increasing brand reputation.
BlackRock, one of the world’s largest asset management companies, recently made sustainability its new priority for investing in organisations. BlackRock’s view is that companies with strong sustainability profiles have the potential to outperform those with poor profiles. BlackRock believes companies managed with a focus on sustainability are better positioned versus their less sustainable peers to weather adverse conditions while still benefitting from positive market environments. Acting on sustainably is becoming a defining factor in a company’s longevity and commercial viability.
SECR requires large businesses to disclose their energy and carbon usage within their annual report, this provides a platform for businesses to show the improvements they are making on this front. If Environmental Social & Corporate Governance is important for your organisation, then SECR gives an opportunity to make some real noise about it. However, if you are viewing SECR as a box-ticking exercise, then there could be negative implications as a result. The regulation only requires companies to report emissions and not actually reduce them. Therefore, if you haven’t taken any steps to reduce your carbon emissions then your organisation’s inactivity on sustainability will be made public for all to see.
SECR also presents an opportunity to address barriers between sustainability professionals and key internal decision-makers, as the report requires board-level sign-off. A recent survey conducted by Inenco and Manufacturing Management magazine showed that alarmingly 59% of respondents said that sustainability decision making sat with health and safety professionals rather than the board or senior leadership. Sustainability professionals can find it difficult to gain board-buy-in when a company’s business strategy is not built on sustainable values. Due to the public nature of compliance and the very real threat of reputational damage, SECR provides a platform to grab the attention of directors and board members to communicate the seriousness of sustainability.
Whilst we recognise that SECR is a mandatory requirement, we believe that it is the first step in understanding your impact on the environment. SECR needs to be viewed as an exercise to create a baseline upon which a continuous improvement plan can be built. The platform also provides a great opportunity to shout about your sustainability success stories year on year. The publicly available knowledge will serve as a shining example to investors, customers, and wider stakeholders on how you are driving sustainable change within your organisation.