ESOS compliance: What’s different between Phase 3 and Phase 4?

Energy Savings Opportunity Scheme (ESOS) is a mandatory energy-saving scheme for large UK businesses. With Phase 4 around the corner, there is a unique opportunity for businesses to reassess their energy use and make great strides in their sustainability efforts.  

Introducing ESOS

ESOS is a mandatory energy assessment scheme aimed at helping large organisations in the UK identify opportunities to improve energy efficiency and reduce costs. Managed by the Environment Agency, the scheme requires eligible businesses to measure their total energy consumption, conduct energy audits, and report compliance every four years.

Want to know more about ESOS? Visit our ESOS guide.

What were the key takeaways from ESOS Phase 2 and 3?

While ESOS Phase 2 concluded back in 2019, there are still some key takeaways to consider when moving through the next stage of compliance, including:

• Early action is crucial: Many companies left their compliance preparations too late, resulting in a mad rush to hire assessors and complete audits.
• Data challenges: In some cases, businesses struggled with inaccurate or incomplete energy data, which has highlighted the importance of maintaining robust energy monitoring systems.
• Potential for savings: Energy audits revealed significant opportunities for cost savings.

Phase 3, ended in June 2024 and we are still expecting to see the full impact from strategic changes made because of this phase. The third phase has emphasised the importance of better data quality, the value of getting a head start, and the impact of considering energy-saving recommendations early on.

What is ESOS Phase 4?

Running from June 2024 to December 2027, ESOS Phase 4 brings a renewed focus on energy efficiency. This next stage highlights the need to align energy audits more closely with Net Zero targets and carbon reduction, encouraging businesses to think beyond compliance and make strides in sustainability.

Phase 4 represents an opportunity to reduce energy costs, enhance environmental impact, and support the UK’s climate commitments. While the core requirements of energy consumption measurement and audit submission remain, the direction of Phase 4 signals a stronger push toward being proactive about implementing energy-saving measures.

What are the differences between Phase 3 and 4?

Focus on Net Zero alignment: Unlike Phase 3, Phase 4 emphasises integrating energy efficiency audits with broader Net Zero and decarbonisation strategies. Companies will be expected to assess not only energy savings but also their carbon footprint.

Enhanced reporting and accountability: Stricter regulations may come into play, with more rigorous follow-ups to verify that businesses are not only conducting audits but also acting on the findings.

How does a lead ESOS assessor help business compliance?

Having a qualified ESOS Lead Assessor is crucial for effectively navigating the complexities of ESOS compliance. Our experts ensure data accuracy, providing valuable guidance to help your business identify areas for improvement and reduce energy wastage.

With their strategic recommendations, they offer actionable insights that can lead to significant cost savings and enhanced sustainability. By appointing an ESOS lead assessor early in the process, you can streamline compliance efforts and access the benefits of your energy assessments.

How Can Amber Help?

At Amber, we understand the intricacies of ESOS compliance and are here to make the process straightforward for you. We can help manage your business’s ESOS submission through a four-step process designed to ensure your compliance. Please get in touch to find out how we can support you.