Energy Savings Opportunity Scheme (ESOS)
New annual reporting for ESOS Phase 3 participants — are you prepared?
*Action plan deadline*
Are you ready for the game-changing shift in Energy Savings Opportunity Scheme (ESOS) reporting?
ESOS Phase 3 participants face a new era of transparency and accountability. Gone are the days of simply identifying energy-saving opportunities — now it’s time to demonstrate your commitment.
ESOS Phase 3 participants no longer have the comfort of a break between compliance years. Instead, they must publish an action plan by 5th March 2025 and report on progress yearly, facing potential financial penalties for non-compliance.
The bold move has been introduced to ensure energy efficiency remains at the forefront of corporate agendas. The ESOS guidance is clear — the government wants to strengthen the quality of ESOS reporting and encourage the uptake of recommendations.
Acting on energy-saving initiatives identified in your ESOS audit will strengthen your energy efficiency narrative within your Streamlined Energy & Carbon Reporting (SECR) if you are in scope and help define your wider decarbonisation plans.
Risk of non-compliance
The Environment Agency (EA), appointed scheme administrator, oversees enforcement actions, including auditing submissions and issuing compliance notifications.
Risk of financial penalties up to £90,000
Failure to notify, maintain adequate records or submit false claims can result in severe penalties. Moreover, if selected for an audit, failing to provide remedial documentation could trigger penalties.
Increased risk of financial and reputational damage
Recently introduced annual notification requirements have quadrupled non-compliance risks.
Public disclosure of Civil Penalties
Civil penalties result in the public listing of a company’s identity, compliance violation and penalty value on the gov.uk website for 12+ months.
The EA issued 2751 compliance notices, 2133 enforcement notices and 123 civil penalties in Phase 2.
Don’t wait to start defining your Action Plan
Our free ESOS Guide contains all you need to know about:
- Changes to ESOS guidance and its impact on qualifying organisations.
- Strategies for the successful adoption of new annual reporting requirements.
- Defining a pragmatic ESOS Action Plan and gaining stakeholder buy-in.
- Overcoming barriers to progressing energy efficiency projects.
Routes to compliance
Phase 4 of the compliance scheme is underway. Qualifying organisations will be required to complete an energy assessment of your areas of significant energy consumption every four years. This means any activities carried out by your organisation that account for at least 95% of your total energy consumption.
You can use a mix of approaches such as ISO 50001 and ESOS energy audits and Display Energy Certificates (DECs).
You’ll be appointed a qualified ESOS lead assessor to ensure whichever route you choose meets the scheme criteria.
What is ESOS?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy compliance scheme for large enterprises in the UK. Almost 12,000 organisations are captured by the scheme.
Businesses that have over 250 employees or meet both the following financial criteria on the qualification date 31st December 2026, are required to comply with ESOS:
- Annual Turnover: > £44 Million
- Balance Sheet Total: > £38 Million
All organisations within a corporate group must comply if at least one UK group member meets the criteria above.
Action plan and progress updates
Following the submission of your Phase 3 compliance you must publish an action plan that covers the four years following your compliance period (which coincides with Phase 4) and covers the period from 6 Dec 2023 to 5 Dec 2027.
The energy-saving opportunities (ESOs) identified in Phase 3 assessments will form the building blocks of your Action Plan. ESOs will include the anticipated energy reduction, estimated cost and potential return on investment should you implement the efficiency measures.
Nevertheless, it is not always clear which ESOs to prioritise as this can differ from one organisation to another. It is crucial that you develop a plan that is ambitious, yet achievable, as you will be required to report on progress against your Action Plan — this is where we can help.
Acting on your ESOS recommendations will undoubtedly provide you with cost, carbon and consumption savings; in turn, strengthening your energy and carbon disclosures. Savvy energy managers will use their compliance as a strategic opportunity to define their Net Zero roadmap.
Our approach:
We work with you to tailor your Action Plan to your organisational needs.
We’ll help you monitor progress, maintain your ESOS evidence pack and submit your annual progress updates.
We’ll optimise your route to compliance, exploring all options, conducting on-site surveys as required.
Via our online portal, visualise your day-to-day consumption against baseline (where day+1 data is available) with quick access to your energy audits and summary reports.
Is your business eligible?
Eligible organisations need to review their total energy consumption, including buildings, industrial processes and transport – undertaking surveys to identify energy saving opportunities.
Talk to an expert
Rob Leak
Director: Compliance Delivery
“By choosing Inspired to help you fulfil your ESOS compliance requirements, you’ll be in safe hands. By the end of Phase 3, we’ll have completed nearly 1000 ESOS submissions and over 3,900 site audits on behalf of our clients. During Phase 3 this equated to identifying over £180m energy cost savings across all surveyed sites.
At Inspired, we are unique in that we are technology agnostic with in-house capabilities to help you go beyond compliance and implement your energy initiatives, ensuring you create long-term energy cost and carbon savings.”
Guaranteed compliance
100% of our audits have been passed by the Environment Agency. In fact, our ESOS lead assessors have been highly commended by auditors for their diligent submissions.
Access to lead assessors
You’ll be assigned an ESOS lead assessor to project manage your ESOS compliance journey. It is important to remember, the demand for lead assessors will significantly increase as each reporting deadline approaches.
Act on your insights
By acting on your surveys year on year you will turn your investment into real savings. We can provide a wide range of energy and water efficiency services to help you achieve this.
Gain maximum benefit
Our experts can further support you to maximise the full value of your ESOS compliance by aligning your disclosures with your wider energy and carbon reporting requirements.
Related services
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From our insights
What’s next for ESOS Phase 3 participants?
ESOS compliance has entered a new era where pinpointing energy efficiency opportunities must lead to demonstrable action.
Updates to ESOS legislation passed in Parliament
We’ve summarised the legislated changes to ESOS Phase 3 and Phase 4 and outlined what these changes mean in practice for your organisation.
Changes to ESOS Phase 3: Everything you need to know
Here, we explore the main changes coming to ESOS Phase 3 and discuss why your business should start its ESOS Phase 3 compliance now.
Get in touch
ESOS represents a real opportunity to create long-term energy, cost and carbon savings. Defining your Action Plan at the earliest possible time will enable you to realise potential cost and carbon savings sooner.
Contact the team today.