ESOS Phase 3: what retailers need to know
This article is provided by BRC Associate Member Amber.
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What is ESOS?
The Energy Savings Opportunity Scheme (ESOS) is a government-led programme that requires large businesses in the UK to assess their energy use and identify opportunities for improvement. Organisations who qualify for these assessments need to reassess every four years. We’re now in the third cycle of assessments, hence the title ESOS Phase 3.
Who needs to comply?
ESOS applies to businesses in the UK that meet one or more of the following criteria:
- Employ 250 or more people;
- Have an annual turnover in excess of £44 million;
- Have an annual balance sheet total of more than £38 million.
What do you need to know about ESOS Phase 3?
ESOS Phase 3 is currently underway and the final deadline for compliance has been extended from 5 December 2023 to 5 June 2024.
If you are a business that is subject to ESOS Phase 3, it is important to be aware of the updated requirements and deadline.
Businesses will need to take steps to ensure that they are compliant with the new requirements. This may involve carrying out an additional energy audit, updating their ESOS report, and sharing their report with subsidiaries.
However, the updated requirements also provide an opportunity for businesses to improve their energy efficiency and reduce their energy costs. By acting now it’s possible to save money and protect the planet.
What are the requirements?
Share ESOS reports with subsidiaries: This will help to ensure that all the energy-saving opportunities identified in an ESOS report are implemented across the entire business.
Provide more information on next steps for implementing recommendations: This will help to ensure that large businesses are taking action to improve their energy efficiency.
Set a target and action plan following the Phase 3 compliance deadline: Businesses will be required to report against these annually within their Streamlined Energy and Carbon Reporting (SECR) leading up to Phase 4.
What happens if you don’t comply on time?
If businesses who are required to comply with ESOS regulations fail to do so on time, then they may be subject to fixed penalties of up to £50,000 and an additional £500 per day of non-compliance (to a maximum of 80 days).
It’s likely that businesses who don’t comply will also have the name of their organisation published on the Environmental Agency website, alongside the amount they were fined.