Energy Savings Opportunity Scheme (ESOS)

Get ready for ESOS Phase 4

Is your business prepared for the next phase of the Energy Savings Opportunity Scheme? Phase 4 is here, and it's essential to stay compliant to avoid penalties and benefit from energy savings.

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ESOS compliance

What is the Energy Savings Opportunity Scheme (ESOS)?

ESOS is a mandatory energy assessment scheme for large organisations in the UK. If you are one of the 12,000 businesses that meet the criteria, you must carry out regular energy audits and identify cost-effective energy-saving measures.

As Phase 3 draws to a close and we look ahead to Phase 4 of the scheme, it is important to be aware of the next reporting deadline which is fast approaching on the 5^th of December 2024.

Completing an ESOS assessment now has additional requirements, in line with the 2023 regulations. In addition to completing ESOS assessments every 4 years, businesses are required to submit an ESOS action plan and report annual progress updates to the Environment Agency (EA).

The EA has announced an extension and will accept Action Plans submitted by the 5th of March 2025.

We’ve helped over 100 businesses achieve ESOS compliance.

Download our helpful checklist

ESOS Phase 3 & 4

Start crafting your ESOS Action Plan

Starting from the third compliance date, following the submission of the compliance notification, you must produce an action plan, setting out:

what you intend to do to reduce energy consumption
when you intend to do it
whether it was recommended through your ESOS assessment
what energy savings you expect to achieve over the four years covered by the action plan
how you estimate these savings

The action plan must be approved by a board-level director (or equivalent) and must be submitted through the compliance notification system by the 5^th December 2024.

Recently, the Environment Agency (EA) has announced an extension and will accept Action Plan submissions up until the 5th of March 2025.

Get support with your action plan

Summary of key changes to the scheme

The headline change to the ESOS scheme is the introduction of a mandatory energy reduction action plan, designed to ensure energy assessments lead to tangible improvements in energy performance. For the first time, ESOS brings in an annual reporting requirement. Large undertakings must report against their action plans by the 5th of December of each interim year (2025 and 2026), leading up to the Phase 4 assessment by the 2027 deadline.

Changes to the scheme will result in estimated savings of £1.12 billion over 2023-2037 through reduced energy bills.

ESOS regulation and penalties

Your environmental regulator is responsible for compliance and enforcement activities. It may issue civil sanctions, including financial penalties if an organisation does not meet the scheme’s obligations.

What are the benefits of complying with ESOS?

If your organisation fulfils the survey, then you will benefit from:

A reduction in your energy consumption
Identify several cost-saving opportunities
Understand ways to lower your carbon emissions

Value we deliver

In-house expertise

We were among the first UK-based consultants to offer ESOS lead assessors, helping organisations to meet requirements as early as possible.

Guaranteed success rates

An audit by The Environment Agency found a shocking 63% of Phase 2 evidence packs were only partially compliant and required some corrective action. We are proud to declare that 100% of our customers achieved compliance through our ESOS guidance.

Beyond compliance

We can help you implement sustainable solutions that reduce energy costs and optimise energy efficiency.

Start saving now

By taking action today you can reap the benefits sooner from your energy-saving opportunities. With energy prices high this makes good commercial sense as well as being good for our environment!

Does my business have to comply with ESOS?

An organisation qualifies if it is classified as a large UK undertaking or part of one of its corporate groups. Corporate groups qualify if at least one UK group member meets the definition of a large undertaking.

Large undertakings

For the qualification date for the fourth compliance period (31st December 2026) a large undertaking is any UK company that either:

employs 250 or more people
has an annual turnover over £44 million, and an annual balance sheet total over £38 million

If you qualify and your organisation is fully covered by ISO 50001, you do not need to carry out an ESOS assessment. You just need to notify the Environment Agency that you’re compliant.

What are the penalties for non-compliance?

Your environmental regulator is responsible for compliance and enforcement activities. It may issue civil sanctions including financial penalties if an organisation does not meet the scheme’s obligations.

Read the Environment Agency’s approach to ESOS regulation and penalties in their enforcement and sanctions policy (annex 2, section D). Other scheme regulators apply a similar approach - see section 15 of the full guidance.

A summary of the penalties imposed is available on data.gov.uk.

What are the deadlines for compliance?

Your organisation's status on the relevant qualification date determines if you must participate in ESOS. If you qualify, you need to notify compliance to the Environment Agency by the compliance date at the end of each compliance period.

Here is a summary of the compliance periods, qualification dates, and compliance dates:

Compliance Period	Qualification Date	Compliance Period Dates	Compliance Date
4	31 December 2026	From 6 December 2023 to 5 December 2027	5 December 2027

Read our latest ESOS related news

1/10/2024

ESOS Action Plans: What do they include?

Discover what an ESOS action plan entails and how to ensure compliance. Learn about essential components, additional actions, and annual progress updates to optimise energy performance and reduce carbon emissions.

1/10/2024

What you need to know about ESOS Phase 4

Get the latest updates on the Energy Savings Opportunity Scheme (ESOS) Phase 4 and what it means for your business. Learn about eligibility criteria, new compliance requirements, and potential changes to align with the Streamlined Energy and Carbon Reporting (SECR) scheme. Understand how these changes could affect your organisation’s journey towards net zero and the importance of early preparation.

ESOS Calendar - Knowing the dates for compliance

1/10/2024

ESOS dates for 2024

Learn the key dates for ESOS Phase 3 in 2024 and ensure your UK business remains compliant with the mandatory Energy Savings Opportunity Scheme. Learn about qualification criteria and how Trident can assist in managing your energy audits and improving efficiency.

Energy Savings Opportunity Scheme (ESOS)

Turn ESOS compliance into a winning opportunity for your business. Whether it's implementing energy-saving recommendations, avoiding penalties, getting ahead on Phase 4, or advancing your sustainability goals. Trident is here to guide you through the process.

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ESOS meaning

What is ESOS, and why it’s important

The Energy Savings Opportunity Scheme (ESOS) supports UK businesses in improving energy efficiency, cutting costs, and reducing carbon emissions. It’s a critical step towards achieving the UK’s net-zero goals.

Launched in 2014, the scheme requires eligible businesses to conduct an energy audit every four years. These audits identify practical ways to save energy and reduce waste, helping businesses operate more sustainably while maintaining performance.

Speak to our ESOS experts

Energy Savings Opportunity Scheme qualification criteria

Who needs to comply with ESOS?

Over 12,000 companies must comply with ESOS. If your business qualifies, you must conduct regular energy audits and identify ways to save energy.

To qualify, your organisation must meet at least one of these criteria:

1. Employee count: 250 or more employees

2. Financial threshold:

Annual turnover exceeding £44 million
Balance sheet total over £38 million

These rules apply to companies, partnerships, trusts, and other corporate bodies. Most public sector bodies are exempt. However, businesses in mixed ownership or part of a larger corporate group must assess eligibility at a group level.

If your entire organisation is ISO 50001 certified, congratulations—you’re already compliant! Just notify the Environment Agency.

Compliance timeline & key steps

Key milestones for ESOS compliance

To simplify ESOS compliance, here's a quick timeline and what you need to know about planning ahead.

Stages to be aware of:

Qualification date: Determine eligibility based on the previous year’s data.
Data collection: Gather 12 months of energy usage information.
Energy audit: Conduct an audit to identify savings opportunities.
Compliance notification: Submit findings by the 5th December deadline.
Implementation (optional): Act on the recommendations to maximise benefits.
Ongoing monitoring: Keep records handy and prep for future phases.

Prep early for Phase 4 success

Early engagement for ESOS Phase 4

Getting ahead on Phase 4 ensures you maximise the benefits of energy efficiency improvements. Starting early helps you secure a Lead Assessor, skip the last-minute rush, and prepare for success.

Preparing early helps you go through audit findings and set up energy-saving steps at your pace and within your budget. This proactive approach reduces stress, spreads out costs, and maximises energy efficiency gains over time.

Early planning also means you can work closely with energy consultants, building a collaborative partnership that drives better results. If Phase 3 felt overwhelming, Phase 4 is an opportunity to plan smarter. Make it a more organised, rewarding process that delivers lasting energy savings, cost reductions, and sustainability benefits.

Start Phase 4 today

ESOS requirements to comply with

An ESOS audit examines your energy use and identifies clear steps to improve efficiency and reduce costs. Here’s what it typically includes:

Data collection & profiling: Collect a year’s worth of energy data across your operations to spot usage trends.

Site surveys: Visiting the facilities allows for a close examination of energy use, data validation, and identification of waste.

Energy management review: Looking at current energy policies, practices, and habits that impact consumption.

Energy use analysis: Studying patterns, identifying peak usage times, and spotting areas of waste.

Energy-saving opportunities: Suggest cost-effective measures like upgrading equipment, improving insulation, or optimising processes with estimated energy savings and payback times.

Transport assessment: Reviewing vehicle energy use and recommending efficiencies, like route optimisation or shifting to electric vehicles.

Reporting findings: Creating a report with prioritised energy-saving recommendations, signed off by a Lead Assessor.

Implementation guidance: Offering steps to start saving energy (though implementing these steps isn’t mandatory under the compliance programme).

Download our ESOS checklist

ESOS Lead Assessor

A Lead Assessor is essential to the ESOS process. They thoroughly review your energy use, identify cost-saving opportunities, and oversee the compliance report submitted to the regulator. Engaging a qualified Lead Assessor early on helps you maximise audit value and stay compliant.

ESOS Action Plan

The ESOS action plan takes your audit results further, helping you prioritise and act on energy-saving recommendations. It outlines timelines, resources, roles, and responsibilities, providing a clear framework for implementing these energy measures. Created post-audit, the Action Plan supports compliance and sets your organisation up for ongoing savings and sustainability. The Environment Agency may review the compliance package in future phases to track energy improvement progress.

Phase 3 & 4

Start crafting your ESOS action plan

Ready to begin your ESOS action plan? Start, customise your plan, and track your progress by following these steps.

Getting started

After submitting your compliance notification for the third compliance date, it’s time to map out your action plan. This should cover:

Your energy goals: Outline the steps you plan to take to reduce energy consumption.
Timing: Specify when you plan to implement these measures.
ESOS recommendations: Identify whether your audit recommended each action.
Expected savings: Estimate the energy savings you aim to achieve over the four years of the action plan.
Savings calculations: Describe how you arrived at these savings estimates.

Submit your action plan by 5th December 2024, with approval from a board-level director or senior equivalent.

Good news: The Environment Agency has extended the deadline for Action Plan submissions to 5th March 2025.

Here’s what to include in your ESOS plan

Benefits of complying with ESOS

Learn what your business will gain when complying with the ESOS scheme:

Save on energy costs

Pinpoint and eliminate energy waste.

Energy efficiency

Gain a clear understanding of energy use and reduce consumption.

Sustainability goals

Reduce your carbon footprint and align with the UK’s net-zero ambitions.

Reputation boosts

Demonstrate environmental responsibility to clients, stakeholders, and employees.

Competitive edge

Lower operational costs while appealing to eco-conscious customers.

Long-term strategy

Turn audits into action plans for ongoing efficiency improvements.

Make the most of your ESOS compliance

Turn your ESOS compliance into a real opportunity. The real value comes from acting upon your audit recommendations. By implementing the identified opportunities, you’ll see direct financial savings, smarter resource use, and improved operational efficiency.

Going beyond compliance helps build trust with stakeholders, meet CSR targets, and support national sustainability goals. Plus, it sets you up for ongoing energy management success, keeping your business efficient for years.

Implement your recommendations

Key changes in ESOS: What’s new in Phase 4

Phase 4 introduces new requirements to encourage genuine improvements in energy efficiency. Here’s what’s changed:

Mandatory Action Plans: Businesses must now create and report on energy-saving plans annually.
Enhanced reporting: More detailed reporting and a closer alignment with net-zero targets mean ESOS is evolving beyond compliance.

The new updates make ESOS a practical tool for saving energy and reducing emissions. This change could save the UK £1.12 billion in energy costs over 14 years.

Trident- ESOS supporting your net zero journey

Reducing carbon emissions

How ESOS supports your net zero journey

Your first step to net zero

ESOS is more than just a compliance requirement; it’s a meaningful step toward achieving net zero. Through its structured audits, the scheme helps you spot real, actionable energy-saving opportunities. That means tangible improvements in your carbon footprint, bringing your organisation closer to its carbon reduction targets.

A holistic approach to carbon reduction

With ESOS, you see the full picture of your energy usage. Giving a chance to assess how and where you're using energy and to find ways to cut down. Implementing the recommendations from your audit is a powerful move towards reducing emissions in line with your sustainability targets.

Aligning compliance with carbon goals

ESOS fits seamlessly into your carbon strategy, ensuring compliance and long-term growth. It provides insights that save money, reduce emissions, and keep you on target with regulations and climate goals.

Learn more from our experts

Meet ESOS deadlines with confidence

ESOS regulations & penalties

Understanding penalties for non-compliance with ESOS

The penalties for non-compliance will be financial, and therefore, compliance is key. Here’s a snapshot of potential penalties:

Failure to audit: Not completing the required audit or appointing a Lead Assessor can result in fines up to £50,000, plus £500 per day.
Inadequate records: Failing to keep an evidence pack can lead to fines of up to £5,000.
Reputational risk: The Environment Agency may publicly list non-compliant organisations, impacting your brand image.

To avoid these penalties, meet all ESOS requirements, including audits, notifications, and record-keeping. Staying compliant prevents fines and positions your organisation to benefit from energy-saving opportunities.

ESOS Phase 3

Missed the Phase 3 deadline? Here's what you need to know

If your business didn’t complete ESOS Phase 3, there’s no need to worry—solutions are available to help you move forward. While the deadline has passed, starting your compliance journey now is essential to avoid potential or any extra fines and get back on track. Acting sooner can help minimise risks and ensure you’re prepared for future phases.

We’re here to guide you through the steps to compliance—without pressure, just practical advice to help you make informed decisions moving forward. Let’s tackle this together and keep your organisation’s energy goals on course.

Speak to our ESOS experts