For the first time ever in the UK, large companies will need to gather data and handle two different carbon reports: the Energy Savings Opportunities Scheme (ESOS Phase 3) and the Streamlined Energy and Carbon Report (SECR).
The amount of data needed for those reports has increased during the last years and it is confusing for most companies as more Scope 3 data is required. However, some of the data you need to gather is the same for both reports.
Additionally, some companies will also need to comply with the Procurement Policy Note 06/21 (PPN06/21) and/or The Task Force on Climate Related Financial Disclosure (TCFD).
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.
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).
Why should I use a software?
To comply with ESOS you will need to do a lot of calculations. It is really important to be accurate with the data collection. Climate change data is as important as financial data, so it will need to be complete, accurate and timely.
You can collect this data manually, through a consultancy, or with a software. Doing it manually is your lowest cost option, but it is easier that you make mistakes or forget some data. Using a software is the best option in terms of cost-time balance. It will require you to enter the data, but top software check if you are missing data or if it is not correct. Moreover, those software contain checklists that will ensure you don’t forget any data.
Using a software will also help you to check which projects are going to be more effective for your company.You only need to upload all the data to the software (you can check what data do you need on the ESOS Checklist dashboard). Once you have submitted everything to PLATO, we will book your ESOS audits and then you can request your report. Our experts will review it before handling it to you.
PLATO is the professional cloud-based software that allows you to comply with ESOS. It is easy to use and you can request help from our team anytime. Moreover, it gives you the opportunity to enhance your company’s energy and cost efficiency through advanced software.
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.