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Streamlined energy and carbon reporting for college corporations

Information outlining good practice in college corporation financial management and assurance.

1. Who is this guidance for?

This guidance is aimed at finance directors, principals and governors of sixth-form and further education corporations.

2. What is the status of this guidance?

The main financial reporting requirements for corporations are set out in the college accounts direction. This guidance is non-statutory and does not replace or modify any of those requirements.

The Companies (Directorsā€™ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (the 2018 Regulations) implement the governmentā€™s policy on Streamlined Energy and Carbon Reporting (SECR).

Whilst corporations are outside of the scope of the 2018 Regulations, the college accounts direction encourages them to make equivalent disclosures on their website. This guidance aims to support corporations by providing an overview of the 2018 Regulations.

This guidance is based on HM Government Environmental Reporting Guidelines: including streamlined energy and carbon reporting guidance March 2019 (the Guidelines) and is not intended to cover every scenario that may arise regarding a corporationā€™s energy consumption and reporting.

If corporations have any questions, they should consult external guidance or professional advisors in the first instance.

3. Why are businesses being asked to report on energy use?

The 2018 Regulations are designed to increase awareness of energy costs within organisations, provide them with data to inform adoption of energy efficiency measures and to help them to reduce their impact on climate change. They also seek to provide greater transparency for stakeholders.

4. Who should report and where?

ESFA encourages all corporations to report for the first time in relation to the 2019 to 2020 reporting period by publishing the information set out below on the corporationā€™s website before 31 March 2021. In future years, the prior year equivalent figures should also be reported for comparison, but this does not apply in the first year.

The Guidelines acknowledge that in some circumstances, an element of the required energy and carbon information may not be practical to calculate. Where this is the case, this fact should be reported, and the corporation should explain what is omitted and what steps it is taking to acquire this information in future.

5. What should the disclosure include?

Corporations making this disclosure should include, as a minimum:

  • its annual UK energy use (in KWh) as a minimum relating to gas, purchased electricity and transport fuel and associated greenhouse gas emissions (in tonnes of carbon dioxide equivalent (CO2e))
  • the methodology used to calculate the required information
  • a narrative of measures taken to improve energy efficiency in the period of the report
  • an emissions intensity ratio chosen by the corporation. Intensity ratios compare emissions data with an appropriate business metric or financial indicator, such as staff numbers, to allow comparison over time or with other organisations
  • in future years, the prior year equivalent figures should also be disclosed for comparison, but this is not required in the first year

5.1 Subsidiaries

If a corporation is reporting at group level it should include energy and carbon disclosures of any subsidiaries included in the consolidation, unless the subsidiary would not itself be obliged to include if reporting on its own account.

5.2 Basis of occupancy

For corporations where there is a landlord/tenant arrangement in place, the party responsible for the consumption of energy should take responsibility for reporting of it, despite not being directly responsible for its purchase. It is anticipated that in the majority of circumstances the college corporation is both the purchaser and the consumer of energy.

6. Elements of the disclosure in detail

6.1 UK energy use

  • Electricity consumption: includes the purchase of electricity by corporations for their own use, including for the purposes of transport.
  • Gas combustion: includes gas consumed for stationary or mobile activities for which the corporation is responsible.
  • Transport: includes energy consumption from transport where the corporation is responsible for purchasing the fuel e.g. fuel used in company/fleet cars for business use, fuel used in personal/hire cars for business use (including where the corporation reimburses staff for business mileage claims) and fuel used in corporation controlled minibuses. This excludes where a transportation service is procured that includes an indirect payment for the fuel consumption e.g. train/plane/taxi/coach travel or similar where the corporation does not operate the transport. However, a corporation may elect to report them separately (including as part of Scope 3 emissions ā€“ see below).
  • Collecting energy use data: It is not expected that corporations will need to engage specialist consultants to support the reporting requirements; the example below shows how a corporation could calculate the figures themselves.

Corporations should use verifiable data where reasonably practicable and should consider obtaining meter data or using invoices or annual statements from supplies. Where verifiable data is not available corporations may estimate data by using data from another comparable time period to fill the gap, calculating figures using pro-rata extrapolation or benchmarking to proxy the energy consumption of one site to a similar site.

6.2 Greenhouse gas (GHG) emissions

The website should state the annual quantity of emissions in tonnes of carbon dioxide equivalent resulting from the total UK energy use from electricity, gas and transport, as defined above. Government conversion factors for company reporting should be used to help measure energy consumption in common units.

6.3 Emissions intensity ratio

The report should state at least one metric which expresses the corporationā€™s annual emissions in relation to a quantifiable factor. For consistency across the sector, corporations are encouraged to use tonnes of CO2e per staff member, based on staff numbers in the audited financial statements. The same ratio should be used each year for comparability.

6.4 Methodology

Corporations should disclose the methodology used to calculate the required information and it is important that robust and accepted methods are used.

There are several widely recognised independent standards available (as set out in the Guidelines) and the standard used in the worked example set out below is the GHG Reporting Protocol-Corporate Standard. Emissions are defined under three different Scopes by the GHG Protocol.

6.5 Energy efficiency action

The report must include a narrative description of the principal measures taken to increase energy efficiency in the relevant year. It is recommended that the actions reported are those which have had a direct impact on energy efficiency and where possible the resulting energy saving from actions reported are also stated. If no measures have been taken, then this fact should be stated.

7. Definition of emission scopes and their minimum reporting requirements under GHG Protocol

  Definitions Report as minimum
Scope 1 – direct GHG emissions Emissions from activities owned or controlled by the corporation that release omissions into the atmosphere. Examples include emissions from combustion in owned or controlled boilers, vehicles. Emissions from gas and transport fuel combustion.
Scope 2 – energy indirect emissions Emissions from own consumption of purchased electricity, heat, steam and cooling. These are a consequence of the corporationā€™s activities but are from sources not owned/controlled. Emissions from purchased electricity.
Scope 3 – other indirect emissions Emissions because of the corporationā€™s actions where the source is not owned or controlled. For example, business travel in private cars. Energy use and related emissions from business travel in hire or employee owned vehicles where staff purchase the fuel.

8. Other sources of information

Corporations may find information contained in recent Condition Improvement Fund (CIF) bids, the DfE Energy Providers Framework and in Display Energy Certificates helpful. Also the ESFA has published Good Estate Management Tools which includes tips to reduce energy consumption.

9. How might corporations go about calculating the energy, greenhouse gas emissions and intensity ratio?

The following is a worked example and method of how a corporation might undertake the calculations to support minimum disclosure.

The corporation has 3 sites, all with their own boilers which are gas fuelled and electricity is purchased. The corporation owns 2 diesel-powered mini-buses and has approximately 20 members of staff who claim business mileage.

This methodology follows the GHG Reporting Protocol and uses the Government conversion factors for company reporting. The conversion factors are updated annually and are generally released each year in June. Corporations should use the 2020 conversion factors for the 2019 to 2020 financial year.

9.1 Illustrative example of calculations

Energy source Consumption Scope Emissions calculation
Gas ā€“ total kWh (kilowatt-hours) used for the year, taken from gas bills for each site 170,345 kWh (gross CV (calorific value)) Scope 1 170,345 kWh * 0.18387 (2020 fuels, natural gas conversion factor gross CV to kg Co2e)

= 31,321kgCO2e

31.32tCO2e

Electricity ā€“ total kWh used for the year, taken from the electricity bills for each site 46,589 kWh Scope 2 46,589 kWh * 0.23314 (2020 UK electricity conversion factor to kgCO2e)

= 10,862 kgCO2e

10.86 tCO2e

Transport – Mini-bus 1: 6,500 miles in the year; Mini-bus 2: 7,800 miles in the year 14,300 miles * 1.19466 (2020 SECR kWh pass & delivery vehs, vans class 2 ā€“ used in lieu of passenger vehicles conversion) = 17,084 kWh Scope 1 14,300 miles = 23,014 km. 23,014 km * 0.18900 (2020 managed assets vehicles, vans class 2 ā€“ used in lieu of passenger vehicles conversion)

= 4,350 kgCO2e

4.35 tCO2e

Transport ā€“ total mileage for petrol reimbursed from staff claims = 1,300 miles 1,300 miles * 1.16319 (2020 SECR kWh pass & delivery vehs, average car conversion factor to kWh) =1,512 kWh Scope 3 1,300 miles * 0.28052 (2020 managed assets vehicles, average car conversion factor to kgCO2e)

= 365 kgCO2e

0.36 tCO2e

Total 235,530km   48.89tCOe
Intensity ratio – Emissions data (tCO2e) compared with an appropriate business activity (staff numbers)     46.89 tCO2e / 324 members of staff

= 0.14 tCO2e per staff member

10. Disclosure of minimum information to be included on the corporationā€™s website based on the above example

Note that from the year 2020 to 2021, the previous yearā€™s data should also be reported for comparison purposes. Corporations may elect to show this information in 2019 to 2020 but this is not a requirement and it is not illustrated here.

Greenhouse gas emissions and energy use data for the period 1 August 2019 to 31 July 2020 ā€“ UK 2019/20
Energy consumption used to calculate emissions (kWh) 235,530
Energy consumption break down (kWh) (optional):  
Gas 170,345
Electricity 46,589
Transport fuel 18,596
Scope 1 emissions in metric tonnes CO2e  
Gas consumption 31.32
Owned transport 4.35
Total scope 1 35.67
Scope 2 emissions in metric tonnes CO2e  
Purchased electricity 10.86
Scope 3 emissions in metric tonnes CO2e  
Business travel in employee owned vehicles 0.36
Total gross emissions in metric tonnes CO2e 46.89
Intensity ratio  
Tonnes CO2e per member of staff 0.14

Quantification and Reporting Methodology

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol ā€“ Corporate Standard and have used the 2020 UK Governmentā€™s Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per staff member, the recommended ratio for the sector.

Measures taken to improve energy efficiency

We have installed smart meters across all sites and increased video conferencing technology for staff meetings, to reduce the need for travel between sites.

Documents

Streamlined energy and carbon reporting for college corporations

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Details

Guides for college corporation:

  • governors
  • accounting officers
  • principals/executive leaders
  • chief financial officers (CFOs)

These College corporation financial management good practice guides do not replace or modify any requirements set out in the college accounts direction (CAD) or the post-16 audit code of practice (P16ACOP). They aim to provide suggestions about good practice.


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