SECR and Scope 3 in 2026: What UK Companies Need to Do Now

There is a well-established legal baseline for carbon reporting in the UK. The Streamlined Energy and Carbon Reporting framework, commonly known as SECR, has applied since April 2019.

Quoted companies must disclose their UK and global energy use and greenhouse gas emissions. Large unquoted companies and LLPs mainly report on UK energy use and the associated emissions. Organizations within scope must also publish at least one emissions intensity metric and explain which energy-efficiency measures they have taken during the reporting period.

For a broader view of SECR and other major reporting requirements, the SINAI Enterprise Guide to ESG Compliance brings the main regulations together in one resource. 

Scope 3 reporting is still largely voluntary under SECR, although certain business travel emissions may form part of the minimum requirements for some organisations. The legal baseline has not changed materially in 2026. What has changed is the environment around it. Investors, procurement teams and emerging UK SRS expectations are placing greater pressure on companies to produce credible value-chain data.

What Changed in UK Climate Reporting by 2026

The core SECR framework remains in place. A 2026 Post-Implementation Review by the Department for Energy Security and Net Zero concluded that SECR had broadly achieved its transparency objectives. It also noted a practical limitation: once reporting becomes routine, its ability to influence business decisions can weaken. The review therefore pointed towards a greater role for forward-looking information.

At the same time, pressure is building outside the SECR framework. Institutional investors and procurement teams increasingly request Scope 3 data whether or not it is legally required.

The UK government has published finalized UK SRS S1 and UK SRS S2 standards for voluntary use. The FCA has also proposed incorporating UK SRS into the listing rules for certain listed issuers, with the proposed rules intended to apply from 1 January 2027, subject to the final policy statement.

For sustainability teams, the practical message is straightforward: the companies that build their Scope 3 processes now will have time to improve them. Those that wait may have to design the same processes under regulatory or commercial pressure.

Where to Start: Scope 3 Prioritization for SECR Reporters

Most companies are not required to report their full Scope 3 inventory under SECR. Even so, they need to understand where the largest value-chain emissions and business risks sit.

A sensible starting point is to screen all 15 GHG Protocol Scope 3 categories. This gives the company an initial view of which categories are likely to be material and where more detailed data collection is justified.

As Neila Vorano, Climate Expert at SINAI, explains:

“Scope 3 categories may therefore be considered material not only because of their emissions magnitude, but also because they expose the company to transition risk, regulatory pressure, supply chain volatility, reputational impacts, or other financially relevant climate-related risks and opportunities.”

— Neila Vorano, Climate Expert, SINAI

For manufacturing and industrial businesses, upstream emissions often carry the greatest weight. Purchased goods and services, capital goods and upstream transportation are commonly among the most significant categories. Downstream emissions can be just as important for companies whose products have long or energy-intensive use phases.

The objective is not to collect perfect data for every category immediately. In many cases, an initial review will narrow the priority list to three to five categories. The company should then document why those categories were selected and why others were excluded.

Commonly material categories include:

1. Purchased goods and services
2. Capital goods
3. Fuel- and energy-related activities
4. Upstream transportation and distribution
5. Waste generated in operations
6. Business travel
7. Use of sold products

For some manufacturers, purchased goods and services alone may account for 70% to 90% of total emissions. This is why supplier data often has a much greater effect on inventory quality than further refinement of operational emissions.

Carbon accounting software can help teams map Scope 3 categories against existing operational and procurement data. It can also show where spend-based estimates are adequate for an initial screening and where primary supplier data should become the priority.

Scope 3 Data Collection: How to Close Supplier Data Gaps

The main challenge is operational rather than theoretical. Scope 3 data is spread across procurement, finance, logistics, internal systems and external suppliers. Each team may work to a different reporting cycle and use different formats, definitions and levels of data quality.

Spend-based estimates are a reasonable place to begin under the GHG Protocol, but they should not become the permanent methodology for material categories. As data improves, companies should move towards activity-based or supplier-specific calculations.

That transition will not happen at the same speed across every category. Some suppliers may already provide product- or facility-level emissions data. Others may only be able to share activity data, while some will provide no usable information at first.

Where primary data is not yet available, sustainability teams should record:

• the estimation method used;
• the source and version of each emission factor;
• the underlying activity or spend data;
• any assumptions applied;
• known data limitations.

This documentation matters. It creates an audit trail and allows the methodology to improve from one reporting period to the next without forcing the team to reconstruct previous calculations.

SINAI supports this work through Scope 3 data collection workflows that centralize supplier inputs, standardize templates and show which data has been received, how it was calculated and where gaps remain.

What Sustainability Leaders Should Do Before Reporting Pressure Increases

Companies do not need to solve every Scope 3 challenge at once. They do need a process that can become more accurate and more complete over time.

Five actions should come first:

1. Complete a materiality assessment. Record the criteria and rationale used to prioritize categories.
2. Select three to five priority categories. Begin with the areas that carry the greatest emissions, financial or regulatory exposure.
3. Assign clear ownership. Procurement, finance, logistics and sustainability should each understand which data they are responsible for providing or validating.
4. Document the methodology from the beginning. Record emission factors, data sources, assumptions and limitations during the reporting cycle, not afterward.
5. Create a Scope 3 maturity roadmap. Define how the company will move from spend-based estimates towards activity data, primary supplier data and assurance-ready reporting.

Starting with a manageable scope is more useful than waiting for ideal data. A documented first version can be reviewed and improved. A process that exists only in theory cannot.

How to Make Emissions Data Audit-Ready

Audit-ready Scope 3 data depends on three basic controls.

The first is traceability: every emissions figure should link back to a source record. The second is methodology documentation: the calculation approach, emission factors and assumptions must be clear. The third is version control: teams need a reliable record of what changed between reporting periods and why.

Together, these controls allow an auditor, regulator or internal reviewer to follow the calculation without relying on undocumented knowledge held by one person.

SECR does not require third-party assurance for most companies. However, demand for assurance is increasing among regulators, investors and major customers. The FRC issued ISSA (UK) 5000 in November 2025 for voluntary use in sustainability assurance engagements and is developing a voluntary registration regime for sustainability assurance providers.

SINAI helps sustainability teams centralize emissions data, manage supplier inputs, document calculation methods and maintain the audit trail required for repeatable, audit-ready reporting.

Book a demo to see how SINAI supports Scope 3 data collection, materiality assessment and audit-ready reporting aligned with UK disclosure standards.

FAQ

Is Scope 3 reporting mandatory under SECR?

Scope 3 is not a baseline requirement for most companies under the current SECR framework. However, UK SRS alignment, investor expectations, and procurement requirements from large customers are making it a practical reporting priority regardless of regulatory status.

Where should a company start with Scope 3?

A materiality assessment across the fifteen GHG Protocol categories is the right starting point. It identifies which value chain emissions are significant enough to report and provides a documented rationale for what was included or excluded.

What if supplier data is not available yet?

Spend-based estimates are a legitimate starting methodology under the GHG Protocol. The priority is to document the estimation approach, the emission factors used, and the known limitations so the methodology can be improved incrementally rather than rebuilt each cycle.

What is UK SRS and how does it relate to SECR?

The UK Sustainability Reporting Standards are the UK's endorsed version of the IFRS S1 and S2 global baseline standards. They are currently available for voluntary use. The FCA has proposed mandatory UK SRS reporting for certain listed issuers from January 2027, but the final rules have not yet been published. The government has also indicated it will consider how UK SRS-based reporting interacts with SECR to reduce duplication.

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