What the rules say
The 2018 regulations that created SECR say the directors' report "must state at least one ratio which expresses the company's annual emissions in relation to a quantifiable factor associated with the company's activities". They don't say which. The government's Environmental Reporting Guidelines add that the ratio should be the one most relevant to your business, calculated on a consistent basis year on year, with the method disclosed.
The guidelines also list examples. For any sector: tonnes of CO2e per £m sales revenue and per full-time equivalent employee. By sector: per square metre of gross store area for retail, per square metre for property, per tonne of production for manufacturing, and per tonne kilometre for transport. DfE goes further for academy trusts and encourages tonnes per pupil, so trusts can be compared.
The three common choices
| Ratio | Suits | Watch out for |
|---|---|---|
| tCO2e per £m turnover | Any business; easy to compare across sectors; the guidelines say financial ratios suit comparisons between firms with different products | Price rises and inflation lower it without any real change. A big one-off contract can swing it |
| tCO2e per employee | Offices, consultancies, agencies and service firms where people drive the footprint | Use full-time equivalents. Outsourcing work makes it look better without cutting anything |
| kgCO2e per m² | Firms whose footprint is mostly heating and powering buildings: property, retail, schools | Use the same floor area measure each year. It says nothing about vehicles or travel |
The guidelines also suggest activity ratios, such as per unit produced, when you compare with firms making similar products. If your business has very different activities, you can give a ratio for each.
A worked example: growth hides progress, and the reverse
A firm takes on six staff and grows turnover by 30%. Its gas, electricity and van diesel go up, but by less. To isolate the business change, both years use the 2026 government factors:
| Year 1 | Year 2 | Change | |
|---|---|---|---|
| Scope 1 and 2, tCO2e | 23.38 | 28.14 | +20% |
| tCO2e per £m turnover | 11.69 | 10.82 | -7% |
| tCO2e per employee | 1.17 | 1.08 | -7% |
| kgCO2e per m² (600 m² both years) | 39.0 | 46.9 | +20% |
Total emissions rose 20%, while emissions per £m and per employee fell. Both statements are true, and a reader needs both. The floor area didn't change, so the per m² ratio moves exactly with the total. This is the trap the government's guidance warns about: an intensity target can be met while total emissions still go up.
The reverse happens too. If turnover falls in a bad year, emissions per £m can rise even when you used less energy. Explain both in the narrative, and if the factors changed between years, say how much of the change came from that. Our post on why footprints dropped in 2026 shows how.
Choosing yours
- Ask what really drives your emissions: buildings, people, vehicles or production.
- Pick a ratio whose bottom number grows when that driver grows.
- Check you'll have the bottom number every year from the same source, such as audited turnover or average FTEs.
- Write down the definition and keep it. If you must change ratio, give both for the year you switch and explain why.
Schools and academy trusts should read carbon reporting for schools, and housing providers our post on charities and housing associations, which covers emissions per home.
How Carbon Recycling helps
Carbon Recycling's SECR report offers three intensity ratios: tCO2e per £m turnover, per full-time employee and kgCO2e per m² of floor area. Enter your turnover, staff or floor area for each year and the report shows this year's ratio next to last year's, calculated on the same basis, alongside your energy use, emissions and method. The free supplier questionnaire answer bank also works out per-employee and per-£m figures for the intensity question customers often ask.