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ESOS Phase 3 compliance is just around the corner. All companies that qualify, need to set up an account on the system by the 5th of June 2024 and file their report by the 6th of August 2024.


Who needs to comply with ESOS Phase 3?

First off, the government thinks everyone should be on board with ESOS Phase 3, and in theory, it’s a voluntary scheme, despite the government’s stance, only a handful of companies voluntarily participated in Phase 2 out of thousands eligible. So, while it’s technically voluntary, not many are jumping at the chance.

So, who needs to comply? Here’s the rundown:

  • UK Companies: If you’re operating outside the UK, ESOS compliance isn’t on your to-do list.
  • Size Matters: You need to meet certain size criteria, which means having either a turnover of £47 million or balance sheet assets of £43 million. You need to meet both criteria, not just one.
  • Staff Count: If you have over 250 staff members. Remember, this count is based on an average headcount, so part-time employees count too.
  • Group Affiliation: If you’re part of a larger corporate group where one subsidiary qualifies for ESOS, then all subsidiaries within the group must comply.
  • Consistent Eligibility: You must meet the criteria for two consecutive reporting periods. So, consistency is key.

If you slip below the threshold due to unforeseen circumstances like the COVID-19 pandemic, you’ll still need to comply if you bounce back over the limit. It’s a two-year commitment.

Potential Changes on the Horizon

Now, here’s where things get interesting. Rumour has it that the criteria might change. There’s talk of lowering the thresholds to 50 staff members and £5 million, potentially capturing a lot more companies in the ESOS net.

While this might mean more work for businesses, it aligns with the urgent need to curb carbon emissions. After all, we can’t keep business as usual if we want to tackle climate change head-on. Plus, the more companies that go through the ESOS process, the more awareness we raise about energy efficiency and sustainability. So, will these changes materialise?

ESOS compliance might seem like a hassle, but it’s a crucial step towards a more sustainable future. And if you ever have questions or need guidance on navigating the ESOS process, we are here to help.

Enistic's carbon accounting software dashboard showing a full carbon report

Find out more information about the new law changes check our YouTube channel “Carbon College“. And if you have any questions or need further assistance, feel free to reach out.