Everything you need to know about ESOS Compliance

Many companies are confused by ESOS compliance and the ESOS energy audit. So, we’ve created a short guide with the information a business needs to understand ESOS and the importance of an ESOS energy audit.  What is ESOS?  ESOS stands for Energy Savings Opportunity Scheme. This is a mandatory energy assessment scheme for large businesses […]

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Many companies are confused by ESOS compliance and the ESOS energy audit. So, we’ve created a short guide with the information a business needs to understand ESOS and the importance of an ESOS energy audit. 

What is ESOS? 

ESOS stands for Energy Savings Opportunity Scheme. This is a mandatory energy assessment scheme for large businesses in the UK that have 250 or more employees or have an annual turnover of more than €50 million and an annual balance sheet total of more than €40 million. 

Businesses that are under ESOS regulations have until the end of ESOS phase 3 to notify the Environment Agency of their compliance. The date for compliance is 5th of December 2023 and every four years after this. 

Who Runs the ESOS? 

The ESOS is a scheme by the UK government that is run by the Environment Agency. Each country of the UK has different regulatory bodies that handle ESOS compliance and enforcement: 

  • England: the  Environment Agency
  • Wales: Natural Resources Wales
  • Scotland: the Scottish Environment Protection Agency
  • Northern Ireland: the Northern Ireland Environment Agency

How Many Businesses in the UK are in the ESOS? 

Recent estimates from the Department for Business, Energy & Industrial Strategy (BEIS) show that about 11,900 UK businesses are required to become compliant with the ESOS. 

Does ESOS Apply to Not-for-Profit Organisations? 

Yes, non-profits can still meet the definition of a large organisation (as outlined above). Charities, trusts, and unincorporated associations may also meet the criteria. 

Is ESOS Still Required? 

Yes, ESOS is still required for overseas businesses that are registered in the UK and have 250 or more employees. It’s also required for Higher Education Institutions that are large enough to meet ESOS qualification criteria and self-declare as in the private sector. 

However, non-profit corporate entities and universities that are almost completely funded by private sources and care homes are not considered public bodies. These all need to participate in ESOS if they meet the qualifications. 

Identifying the Key ESOS Phase 3 Milestones

The ESOS Phase 3 compliance periods last for four years. The qualification date for ESOS Phase 3 is 31 December 2022. 

Qualifying businesses need to complete their ESOS audit or use another route to compliance and notify the Environment Agency online of compliance by 5 December 2023. 

What are the ESOS Regulations? 

The Energy Savings Opportunity Scheme Regulations 2014 – ESOS Regulations is the UK government’s method to implement the requirements of Article 8 of the EUs’ Energy Efficiency Directive (2012/27/EU). 

ESOS is the mandatory energy audit and energy efficiency identification scheme for large organisations and their corporate groups. The objective of ESOS is to increase energy efficiency, improve business profits and competitiveness, and put an end to climate change. 

Corporate Grouping for ESOS Qualification and Participation 

When a large organisation meets the ESOS qualification requirements, all UK entities within that corporate group (those with the same UK parent company) need to take part in ESOS. 

If there is more than one UK parent company sharing the same overseas parent company, each needs to form one participant and notify the Environment Agent separately about compliance, and this should include all subsidiaries within the same corporate group. 

However, if there is more than one UK parent with the corporate group, the highest UK parent groups can choose to come together and comply under the same notification. In this case, each parent company should agree in writing to participate together, and copies of the agreement must be kept within the evidence pack. 

How Often Should an ESOS Audit Be Done? 

ESOS requires that a company’s total energy consumption over a period of 12 consecutive months be calculated and must include the qualification date of 31 December 2022 for Phase 3. This makes the earliest reference period for ESOS Compliance Phase 2 as 1 Jan 2022 to 31 December 2022. 

However, the actual ESOS audit can be done anytime during the ESOS compliance periods for the respective phases. However, the reference period for calculating the energy consumption must include the qualification date and end before the compliance date for the respective phases (they must include 31 December 2022 and end before 5 December 2023) for ESOS Phase 3. 

Routes to Compliance

ESOS Phase 3 participants can choose one or more routes to compliance that cover a minimum of 95% of their total energy consumption, as shown below: 

  • ISO 50001 certification 
  • Display Energy Certificates – DEC
  • Green Deal Assessments
  • ESOS Audit

If you opt to comply with ESOS completely or partially using any of the above certifications, the certificate has to be valid on the compliance date period (5 December 2023) for ESOS Phase 3. 

Why Use Us for Your ESOS Compliance and Energy Audit Requirements? 

To start with, our ESOS lead assessor is a CIBSE-accredited energy efficiency consultant who is registered on the Energy Institutes Register of Professional Energy Consultants (RPEC). They have extensive experience with conducting energy efficiency audits, and identifying and developing practical and cost-effective energy efficiency reductions.

We offer a professional and personalised ESOS compliance service in London and across the UK. What’s more, our ESOS lead assessor works with you to find your company’s ESOS gap analysis, develop a structured approach to fit your business requirements, conduct the ESOS audit, and provide you with an ESOS compliance report and evidence pack. 

Many businesses need help to gather energy consumption data. It can also take up valuable time during the ESOS Phase 1 and Phase 2. We can help you jump this hurdle and reduce the time it takes to gather data. We do this by offering you a user-friendly template that keeps all energy consumption data in one place. It’s much easier to keep the data in a centralised location and to optimise energy consumption data, analysis, benchmarking, and reporting for ESOS and SECR. 

Our methods help you significantly reduce the associated costs and time spent on the ESOS audit, and it works to ensure that your ESOS compliance is completed on time. 

If you’d like more information about our ESOS compliance & Energy Audit requirements, contact us today! We’re happy to answer your questions and arrange your ESOS compliance & energy audit at a time that’s convenient for you! 

Mastering Supply Chain Engagement

Tuesday 9 July 2024, 12:00-1:00 PM

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