The Energy Savings Opportunity Scheme (ESOS) Phase 3 started in December 2019 and UK businesses have until 5th December 2023 to comply, However they should now start to gather key data. Failure to comply could now lead to fines of up to £200,000. 

The Energy Savings Opportunity Scheme (ESOS) refers to a mandatory energy assessment scheme for companies, with the purpose of ensuring that UK organisations are as energy-efficient as possible. Large companies are required to comply with ESOS by providing detailed assessments and audits of their companies’ energy usage, with a view to increasing energy efficiency and reducing carbon footprint.

More companies than ever may be complying with ESOS, meaning that booking an authorised audit will be more challenging and lead assessors won’t be as easy to source as before.



Who needs to comply with ESOS Phase 3?

The key date for assessing whether or not you qualify is 31 December 2022; if your company meets the conditions for ESOS (stated below) on that date, you must comply.

Some changes to the criteria are expected to be announced before 31 December 2022. The Scope of ESOS Phase 3 is expected to be expanded in terms of entry criteria and more data will be required including your Scope 1, 2, and 3 greenhouse gas emissions.

All companies who meet the following criteria will need to comply with ESOS:

  • Over 250 members of staff, or
  • Have a turnover of £44 million, or
  • An annual balance sheet of over £38 million, or
  • An overseas organisation with over 250 employees in the UK, or
  • Are part of a larger organisation, which falls into any of the above categories.

Also, if you are a company that is UK registered but overseas then you will also be required to take part, regardless of whether you are a ‘large undertaking’.

If you’re very close to the qualification threshold, or if the size of the business has changed substantially in the past few years, you should check the full UK Government guidance about ESOS compliance.

ESOS Scope is expected to change as the scheme is being reviewed by the Department for Business, Energy & Industrial Strategy (BEIS). 

If you qualified for ESOS phase 2 but don’t think that you qualify for phase 3, we advise you to email the Environment Agency (ESOS@environment-agency.gov.uk) to inform them about your new situation.

When do companies need to start collecting data?

It is important to start gathering the data and writing the report as soon as possible. This is because auditing is a lengthy and time-consuming process that involves the use of professional ESOS auditors and lead assessors, which are difficult to procure so close to a deadline. Moreover, it should be noted that not being compliant could result in fines of up to £200,000. In order to provide our clients with the ESOS reports as soon as possible within the legislation, we will be looking to start collecting from 1st January 2022.

How do companies comply with ESOS?

To fulfill the legislation your company will need to provide a calculated Total Energy Consumption (TEC), as well as identifying their key areas of significant energy consumption. It is also a requirement for any company that qualifies for ESOS Phase 3 to get a series of energy audits of their estate completed as well. 

These comprehensive energy audits, combined with a measurement of your total energy consumption for a calendar year, are used to generate a series of carefully considered energy-saving opportunities, which could be used to significantly reduce both energy use and cost. The report is intended to give a company the information it needs to understand current consumption, spot areas of concern, and plan for energy reductions. 

Additionally, a ‘lead assessor’ (this will need to be someone who is or can become a member of a suitable approved professional body) will need to be appointed, as they will be responsible for signing off on the completed ESOS assessment. If your company fails to comply, then as previously stated, it could face fines as large as £200,000 and will be instructed to carry out the work required anyway.

We are currently halfway through the Energy Savings Opportunity Scheme (ESOS) Phase 3. UK businesses have until December 2023 to comply however, we advise you to start ASAP to avoid any risk of penalties.

Compliance scope and format are expected to change as the scheme is being reviewed by the Department for Business, Energy & Industrial Strategy (BEIS).

Does Enistic guarantee compliance for ESOS Phase 3?

At Enistic, we guarantee compliance for ESOS Phase 3 despite any confirmed changes to scope.  PLATO, our smart, automated carbon accounting software can process both energy and all emissions data and allows us to easily create a fully compliant report. Our experts are up to date regarding all ESOS regulations and will work with you to ensure that your report is complete and compliant.

We are number 2 in the UK market for ESOS. Our many years of experience with ESOS and our close relationship with the Environmental Agency, allow us to be confident that we can handle any questions or concerns that you have with ESOS Phase 3. We know it’s going to be bigger in scope and more complex than ESOS Phase 2 but we have planned for this. 

Enistic employ approved auditors as permanent members of staff, ensuring that they are available to our clients at any point during the year. They are also kept up to date with the new ESOS changes and they guarantee all audits are delivered to the highest  standards. No Enistic client has ever failed compliance or been fined by the Environment Agency.

Compliance scope and format are expected to change as the scheme is being reviewed by the Department for Business, Energy & Industrial Strategy (BEIS).

Book a free consultation

Contact one of our lead assessors today and book a free consultation to see how Enistic can help you to comply with ESOS Phase 3. We will make the process time and cost-effective. ensuring you move forward, informed, empowered, and confident that you have control.  

Enistic Limited

Our Services

Streamlined Energy and Carbon Reporting (SECR) is a piece of legislation from the UK Government which replaced the Carbon Reduction Commitment (CRC).

The Energy Savings Opportunity Scheme (ESOS) was introduced by the UK Government to promote energy efficiency and to ensure large enterprises are regularly assessing their energy usage.

The Procurement Policy Note (PPN 06/21) sets out how government departments need to take account of suppliers’ Net Zero Carbon Reduction Plans in the procurement of major government contracts.

Science-based targets (SBT) are targets that help companies define their journey to reduce carbon emissions, helping prevent the worst impacts of climate change and future-proof business growth.

The Task Force on Climate-Related Financial Disclosures (TCFD) was developed to create consistent climate-related financial risk disclosures for use by organisations in providing information.

Net Zero is achieving a neutral carbon footprint. In other words, it refers to having net-zero carbon dioxide emissions by balancing emissions against carbon reduction and offsetting strategies.

Insights and Resources

Discover what has been happening with our latest videos. Learn about sustainability compliance, net zero and carbon reporting.

Join us for webinars that help reach your sustainability goals or watch past webinar recordings.

Find all the answers you need about sustainability compliance, net zero and environmental regulations.

Explore case studies to help your business on its journey towards net zero. 

Learn more about topics that will help your business take action with fresh thinking on sustainability.

Discover what has been happening in our blog. Learn about sustainability compliance, net zero and carbon reporting.