ESOS Consultancy Services

The government has confirmed that several changes proposed in the ESOS consultation are expected to be implemented for Phase 4, subject to parliamentary approval. These include: 

• Removing Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) as eligible compliance routes. 

• Requiring organisations to report on progress made against any action plan commitments included in their ESOS assessment. 

• Providing an explanation where action plan commitments have not been met. 

Full guidance on these changes, along with updates to the Manage your ESOS reporting system, is expected to be available by early 2027, ahead of the Phase 4 compliance notification deadline on 5 December 2027. 

Due to delays in delivering the Phase 3 legislation and guidance, the government has decided to postpone the introduction of net zero‑related requirements until Phase 5. This is to allow sufficient time for businesses to understand and adapt to what will be a major change for ESOS. 

If you have an ISO 50001 energy management system that’s certified by an accredited certification body and covers all your energy supplies as included under ESOS (for the whole corporate group in the UK), this counts as your ESOS audit, you only need to carry out limited additional actions and you do not need to use a lead assessor to review your compliance. To be compliant, the certification must remain valid at the compliance date.

If you are using ISO 50001 as one of your routes to compliance, then the energy management system must be certified by one of the following:

• a United Kingdom Accreditation Service (UKAS) accredited certification body
• a body accredited by another EU member state’s national accreditation body
• a body accredited by a body which is a member of the International Accreditation Forum

You are still required to:

• calculate your total energy consumption and energy intensity ratios
• calculate your energy savings since the previous ESOS compliance date, complete an ESOS report and share information about your ESOS compliance with other group undertakings
• get a board level director to confirm that they have reviewed findings of your ISO 50001 certification, the organisation is compliant and the information which is going to be entered in the compliance notification is correct
• submit a compliance notification to the Environment Agency which specifies that this is how you are compliant with ESOS
• following the compliance notification, complete an action plan and subsequent progress updates
• keep some evidence in an evidence pack

A number of these actions would be included in an ISO 50001 management system, and we can work with you to ensure your management system aligns to these reporting requirements.

You can also consider implementing ISO 50001 as a route to compliance for the future and to demonstrate your ongoing energy management beyond regulatory compliance with ongoing review of improvements and cost savings and supporting the annual action plan and progress updates. Teamwork can review this option with you to identify the benefits of this route to compliance.

All organisations that fall under the qualification requirements are required to complete an ESOS assessment to:

• measure total energy consumption
• identify areas of significant energy consumption (if relevant)
• calculate your energy intensity ratios
• consider available routes to compliance
• ensure areas of significant energy consumption (or total energy consumption if you have not identified areas of significant energy consumption) are covered by a route to compliance
• appoint a lead assessor (unless you have zero energy, use less than 40,000 kWh of energy or have ISO 50001 energy management system which covers 100% of your total energy consumption)
• carry out energy audits for any areas of significant energy consumption not covered by an alternative compliance route
• complete the ESOS report
• share the ESOS report, and any relevant documentation relating to alternative compliance routes, with group undertakings
• get one or more board level directors to review the findings of the assessment
• submit an ESOS compliance notification through the MESOS online notification system
• keep a record in your evidence pack of the ESOS compliance notification, a copy of your ESOS report and any other records of the assessment

In the third compliance period participants using ISO 50001 as an alternative route to compliance must now complete some additional requirements, which are set out in FAQ 3. 

For an ESOS Assessment you need to appoint a lead assessor, who is a member of an approved professional body register, to carry out and oversee or review your energy audits and overall ESOS assessment.

If you qualify for ESOS and your organisation is fully covered by  ISO 50001, the certificate must have been issued, on or after the start date of the compliance period and the certification must cover energy consumed by assets and activities that relates to the total energy consumption. You will not be required to appoint a lead assessor.

For all ESOS routes compliance you must:

• calculate your total energy consumption and, as applicable, significant energy consumption
• calculate energy intensity ratios
• complete an ESOS report and share it (or relevant parts of it) with you group undertakings
• get a director to confirm that they have seen and considered recommendations from the audit and/or alternative compliance routes, that the participant is compliant and that the information required for the notification of compliance is correct
• submit a notification of compliance to the Environment Agency
• complete an action plan and subsequent progress updates
• keep an evidence pack

Depending on the compliance route used, specific requirements apply in relation to the ESOS report, the notification of compliance, and the evidence pack.

Teamwork can support you with understanding all these requirements and the best route for your organisation for ESOS compliance – from your ESOS Assessment and audit, through to sign off from our registered ESOS Lead Assessor and submission to the Environment Agency.

The Environment Agency (EA) has strengthened its penalties for non-compliance with the Energy Savings Opportunity Scheme (ESOS) as the scheme enters its third phase. This is a list of possible non-compliances the associated Regulation and range of penalties that could apply:

• Failure to Notify:An initial penalty of up to £5,000, an additional £500 for each working day starting on the day after service of the penalty notice until the compliance notification is completed, subject to a maximum of 80 days and publication
• Failure to Maintain Records:An initial penalty of up to £5,000, plus costs incurred by the compliance body to confirm compliance. The penalty notice may specify steps to remedy the breach
• Failure to Undertake an Energy Audit:An initial penalty of up to £50,000, an additional £500 for each working day starting on the day after service of the compliance notice, until the breach is remedied, subject to a maximum of 80 days and publication. The penalty notice may specify a requirement to undertake an ESOS assessment
• Failure to Comply with an Enforcement/Penalty Notice:An initial penalty of up to £5,000, plus an additional £500 for each working day starting on the day after service of the penalty notice, until the breach is remedied, subject to a maximum of 80 days and publication
• False or Misleading Statement: A penalty of up to £50,000 and publication

If you’re subject to the publication penalty, the regulator will publish details on their webpages of:

• the person on whom the penalty was imposed
• the legal requirement that was not complied with
• the amount of any financial penalty imposed