ESOS: Energy Savings Opportunity Scheme
Businesses face new ESOS regulations requiring energy audits and progress reports.
28 October 2024
Technology, Media and Telecommunications
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As highlighted in our recent Environmental Social Governance (ESG) Guide, businesses are faced with a rising array of legislation and regulation, particularly around the environment.
Whilst initially targeted at listed companies and larger organisations, regulations are starting to have a direct impact on the SME supply chain. A good example is ESOS – Energy Savings Opportunity Scheme.
Administered by the Environment Agency, ESOS is a mandatory energy assessment scheme for organisations in the UK that meet its qualification criteria. Your organisation qualifies for the third compliance period (ESOS phase 3) if, on 31 December 2022, it met the ESOS definition of a large undertaking.
A large undertaking is any UK company that either:
- employs 250 or more people, or
- has an annual turnover more than £44m, and an annual balance sheet total in excess of £38m
Organisations that qualify for ESOS must carry out ESOS assessments every 4 years. These assessments are audits of the energy used by their buildings, industrial processes, and transport. The current Phase 3 data deadline was 5th June 2024 with a requirement to submit an action plan by 5th December 2024. The action plan deadline has been extended to 5th March 2025 but an annual progress report must also be submitted by 5th December each year going forward. Both the action plan and the progress updates will be published by the Environment Agency.
As an organisation now employing over 500 people, at Bishop Fleming we have submitted three ESOS reports since 2015 and are currently working on our action plan as part of a wider carbon reduction exercise. The Phase 3 ESOS reporting process is much more robust that previous submissions, and by making the action plans and progress reports public, the government clearly aims to increase business accountability for reduction of energy use.
Whilst the new ESOS requirements represent an increase in administration, at Bishop Fleming we are viewing them as part of our overall carbon reduction plan and will use the annual progress report deadlines to focus on key areas.
