Helping you prosper
From 1 September 2025, the Academy Trust Handbook (ATH) 2025 reinforces the Department for Education’s Sustainability Leadership and Climate Action Plans in Education policy, requiring every academy trust to appoint a named sustainability lead and implement a Climate Action Plan (CAP). The ATH signposts DfE’s sustainability guidance and elevates environmental governance into the mainstream of trust operations and reporting.
While CAPs begin as operational plans, they have material consequences for financial reporting, audit, and governance.
Why sustainability now matters in your accounts
Climate action planning can affect several areas of your financial statements:
Capital commitments
Approved and contracted CAP projects, such as solar panels, building management systems, or insulation, must be disclosed in your capital commitments note.
Provisions and contingent liabilities
If your CAP creates obligations with reliable cost estimates (e.g., removing old boilers or remediation work), recognise a provision. If costs or timing are uncertain, disclose as a contingent liability.
Grants and income recognition
Many sustainability projects involve capital expenditure. Grants for these projects should be recognised in line with the Academies Accounts Direction (AAD):
- Recognise income when entitlement, probability, and measurement criteria are met.
- Show unspent amounts in the restricted fixed asset fund.
Going concern
Large CAP programmes may alter cash profiles. Trustees should address funding, phasing and sensitivities in the going concern narrative, particularly if works depend on external bids or if energy‑saving benefits are needed to balance budgets.
Streamlined Energy and Carbon Report (SECR) alignment
If your trust falls under SECR, ensure consistency between SECR data (emissions baselines, intensity metrics, efficiency actions) and your CAP objectives.
Governance and regularity
The DfE expects boards to show clear oversight of sustainability. Carbon-related projects may require tendering. Failure to follow procurement rules can impact regularity. Keep clear records of approvals, supplier selection, spending, and outcomes to support both financial audit and regularity assurance.
Practical steps for finance & governance teams
Appoint and evidence oversight
Document board approval of the CAP and the responsibilities of your sustainability lead.
Map your CAP to disclosures
Identify CAP projects in your capital programme and plan when spending will occur. Prepare notes for capital commitments and any provisions.
Update accounting policies
Review accounting policies to ensure capital grants, expenditure and provisions for sustainability projects are recognised in line with the latest AAD guidance.
Integrate SECR and CAP
Use one consistent set of data for energy use, emissions and savings. Align CAP baselines with SECR conversion factors and targets.
Coordinate estates, finance and risk
Add CAP actions to the risk register (eg. heat, flood, energy price volatility), link them to estate policies, and set clear delivery checkpoints so progress can be tracked.
See our Understanding sustainability leadership: guidance for academy trusts for more practical steps to meet the DfE’s climate action reporting requirements.
The next step
For further information on how we can support your academy trust in with sustainability requirements, please contact your usual UHY academy adviser or our sustainable business services team.
