What Is ESOS Phase 4 and What Does It Mean for Your Business?
Understanding ESOS (Energy Savings Opportunity Scheme)
ESOS is a mandatory UK government scheme requiring large organisations to conduct energy audits every four years across building operations, transport, and industrial processes. The goal? To identify cost-effective opportunities to save energy and reduce carbon emissions.
Who Needs to Comply with Phase 4?
Your business must start preparing if it meets either of the following criteria on 31 December 2026:
- Employs 250 or more people
- Has a turnover exceeding £44 million and a balance sheet total over £38 million
- Or is part of a corporate group that meets those thresholds.
Key Dates to Know
- Phase 4 Compliance Period: 6 December 2023 – 5 December 2027
- Qualification Date: 31 December 2026
- Final Submission Deadline: 5 December 2027
What’s New for Phase 4?
- Mandatory Action Plans
Now, walking through the audit isn’t enough—you must create a board-signed Action Plan detailing how you'll implement energy-saving recommendations . - Progress Reporting Required
You must show progress in the years following your Action Plan. If you've missed targets, you’ll need to transparently explain why. - Deprecated Compliance Routes
Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) will no longer be valid compliance options - Optional Net Zero Alignment
While mandatory net zero requirements are pushed to Phase 5, you can voluntarily adopt new PAS 51215‑1:2025 (energy + decarbonisation process) and PAS 51215‑2:2025 (assessor competencies) for future-proofing.
Why This Matters — Not Just Compliance, But Opportunity
Failing to comply can lead to hefty fines—up to £50,000, plus daily penalties. More importantly, approaching ESOS as a strategic tool can help your business:
- Reduce energy costs through practical efficiency improvements.
- Strengthen sustainability and ESG credentials, while aligning with broader goals like SECR and Net Zero
- Benefit from clearer strategic planning driven by accountability and progress tracking
What You Should Do Now
1. Check Eligibility- Use your data as of 31 December 2026 to determine ESOS Phase 4 applicability.
2. Appoint a Lead Assessor- Secure a qualified assessor early—availability may become limited.
3. Gather Energy Data- Cover 100% of energy consumption—buildings, transport, processes.
4. Conduct Energy Audits-Target at least 90–95% of your consumption in scope, identify audit findings
5. Develop and Board-Sign Action Plan- Translate audit findings into actionable steps with real deadlines.
6. Submit Report & Action Plan by December 2027- Via the official ESOS portal.
7. Track Progress Annually- Be ready to report and explain progress for 2025 and 2026.
8. Consider Voluntary Net Zero Alignment- Use PAS 51215 standards if you want to get ahead
