SECR reporting for financial services — UK guide

If you operate a UK bank, asset manager, insurance company, fund, fintech, broker or wealth manager meeting the SECR thresholds (£36M+ turnover, £18M+ balance sheet, or 250+ employees), this guide covers what to file and where most financial services firms get it wrong.

SECR challenges specific to financial services

Four problems generic SECR templates don't handle for financial services:

1. Operational footprint is genuinely small but stakeholders expect "more". Most UK financial services firms are leased-office tenants with no fleet, no industrial process and no significant on-site energy. Scope 1+2 might be under 200 tCO₂e for a £500M turnover asset manager. Reporting just that figure looks unserious to investors who expect financed emissions disclosure.
2. Financed emissions (scope 3 cat 15) are the entire story. A UK bank or asset manager's financed emissions — the GHG emissions of the companies and projects they lend to or invest in — can be 1,000+ times the operational footprint. The Partnership for Carbon Accounting Financials (PCAF) Standard sets the methodology; UK FCA TCFD-aligned disclosure rules effectively mandate it for premium-listed companies and large asset managers.
3. SDR and TCFD interact with SECR. The UK's Sustainability Disclosure Requirements (SDR), the existing TCFD-aligned disclosure rules, and FCA SDR labelling rules for investment products all overlap with SECR. A SECR report that ignores this regulatory context looks behind.
4. Insurance underwriting and reinsurance create insured emissions. A separate but related concept: insurance companies' insured portfolio emissions, emerging via PSI (Principles for Sustainable Insurance). Some leading-edge insurers disclose voluntarily.

Typical scope 1 emissions in financial services

Scope 1 for financial services is usually small:

• Natural gas — office heating and hot water (where the firm owns its building or has a direct gas meter; most are tenant-only)
• Diesel, petrol, hybrid — owned vehicle fleet (small — typically C-suite cars; many firms have zero owned fleet)
• F-gas refrigerant leakage — only material for firms that own and operate their building HVAC; usually a landlord scope
• Diesel — back-up generators (a resilience requirement for data centres and trading floors)

A typical UK financial services firm — even a multi-billion-pound asset manager — might have scope 1 under 100 tCO₂e. The narrative section must explain this credibly: leased premises, fully cloud-migrated IT, no fleet.

Typical scope 2 emissions in financial services

Scope 2 is grid electricity:

• Office lighting, small power, IT equipment (workstations, screens)
• Office HVAC — where tenant-paid or self-owned
• Hot water systems (where electric)
• On-prem servers and trading IT — where the firm runs its own data centre or trading floor
• EV charging infrastructure — increasingly common at HQ campuses

Most modern UK financial services firms have migrated workloads to public cloud (AWS, Azure, GCP), substantially reducing on-prem scope 2 (and creating a corresponding scope 3 cat 1 cloud line).

Scope 3 considerations for financial services

Scope 3 is voluntary for SECR, but for financial services it dominates total emissions by 3–4 orders of magnitude. Critical categories:

• Category 1 — Purchased goods and services — IT cloud services (AWS, Azure, GCP), market data (Bloomberg, Refinitiv, FactSet), professional services (legal, audit, consulting), custody, settlement services
• Category 2 — Capital goods — IT hardware (laptops, monitors, servers)
• Category 6 — Business travel — typically a significant scope 3 line for client-facing teams
• Category 7 — Employee commuting — significant for office-based workforces
• Category 8 — Upstream leased assets — landlord-controlled common areas in leased offices
• Category 15 — Investments / Financed emissions — for banks, asset managers and insurers, this is the dominant emissions category and the entire point of SDR / TCFD-aligned disclosure. PCAF Standard methodology

PCAF defines methodologies for listed equity and corporate bonds, business loans, project finance, commercial real estate, mortgages, motor vehicle loans, and sovereign debt. Each asset class has its own attribution approach. For insurance underwriting, the PSI Principles for Sustainable Insurance is the emerging framework.

Common mistakes financial services firms make

1. Reporting only operational scope 1+2 and ignoring financed emissions — produces a SECR report dominated by office lighting that looks superficial
2. Excluding scope 3 cat 15 (financed) because PCAF methodology is complex — even a year 1 partial calculation on top 10 holdings is better than nothing
3. Forgetting cloud computing scope 3 — AWS, Azure and GCP all publish customer emissions; pull quarterly
4. Reporting tCO₂e per £1M turnover without per £M AUM, per £M loan book, or per FTE — the sector intensity metrics
5. Treating insured portfolio as out of scope — emerging best practice (PSI) increasingly expects disclosure for non-life insurers
6. Not aligning SECR with TCFD / SDR submissions — the same data should feed all three disclosures
7. Excluding business travel because data is in expense reports — recoverable from Concur or equivalent

Trade body context — PCAF, NZBA, NZAM, PRI, UK Finance, ABI

The Partnership for Carbon Accounting Financials (PCAF) provides the global methodology standard for financed emissions. UK signatories include all major banks and asset managers. The PCAF Standard is the auditor-expected methodology for SECR scope 3 cat 15.

For banks, the Net-Zero Banking Alliance (NZBA) sets sector decarbonisation targets aligned to 1.5°C; UK Finance is the trade body. For asset managers, the Net Zero Asset Managers (NZAM) initiative and the Investment Association (IA). For insurance, the Association of British Insurers (ABI) Climate Change Roadmap and the PSI Principles for Sustainable Insurance. The FCA SDR labelling rules and existing TCFD-aligned disclosure rules effectively require SECR-aligned financed emissions disclosure for in-scope firms.