ESOS Compliance: Navigating the UK’s Energy Savings Opportunity Scheme


ESOS stands for Energy Savings Opportunity Scheme. It is an energy saving and energy assessment scheme introduced to incentivize big UK-based companies to effectively energy savings measures. Under this scheme, the organizations should conduct audits once every 4 years on their energy usage.

The purpose of this scheme is to introduce cost-effective recommendations for helping various organizations to reduce their energy demand as well as increase their energy efficiency. Moreover, due to this, business cost savings will be reduced.

Which Organizations are to Comply With ESOS?

If an organization meets 3 criteria, it should comply with the ESOS. The three criteria are:

  • Based in the UK
  • Has 250 or more employees
  • Has an annual turnover of 44 million pounds or more

Public sector organizations and SMEs are exempt from ESOS. As per the current 3rd phase of ESOS, the audits of organizations need to be completed and reported to Environment Authority by 5th December 2023. The next phase will be phase 4. In phase 4, it is expected that UK Government will alter the ESOS balance sheet along with the turnover threshold to align with SECR.

Other undertakings can qualify for ESOS schemes. It includes public companies, limited companies, partnerships, trusts, limited liability partnerships or private equity companies, and universities that get funding from private sources.

The Benefits of Complying With ESOS

There are certainly a few perks and benefits of complying with ESOS that you must know. This scheme is there to enable a business to identify as well as implement cost-effective energy savings. So the ESOS audits are to work as the catalyst for energy efficiency improvements which will help a business to become more cost-effective and sustainable in the long run.

So the benefits of following this scheme are to be seen regarding proactive energy management.

Complying with the ESOS scheme makes your business go green and reduces the overall carbon footprint in the best way possible. You make a real difference by carrying out your energy audits, producing reports, and ensuring energy efficiency.

ESOS Regulations and Fines

The environment agency of the UK has laid out a clear regulation that an organization is supposed to follow. If a business fails to comply with the scheme, fines will be imposed on them. The fines can range from 5,000 to 90,000 pounds depending on various factors and aspects.

On the other hand, upon failing to meet ESOS compliance, a company’s reputation will be damaged to a great extent. Investors and consumers might stay away from the business. So it will do more harm than good.

Do Your Research

If you happen to be running a UK-based business, then you are supposed to do extensive research to explore different aspects of ESOS compliance. Not to mention, you also need to check out the criteria. If you are to abide by the compliance, you should do the needful for obvious reasons.

Energy cost reduction will be achieved upon following this scheme. Whether you follow the compliance or not, it will have a long impact on your business to a great extent. So consider every aspect regarding it.