ESOS Phase 4: What UK Businesses Need to Know
The ESOS Phase 4 qualification date is approaching, and UK businesses that meet the criteria have some important deadlines to prepare for.
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for qualifying large organisations. It helps businesses understand their energy consumption and identify opportunities to improve energy efficiency.
With the qualification date set for 31 December 2026, now is a useful time to establish whether your organisation needs to participate and what information it should start preparing.
The qualification date isn't the deadline for completing an ESOS assessment. Businesses that qualify generally have until 5 December 2027 to complete their assessment and submit their notification of compliance.
In this guide, we'll explain the ESOS Phase 4 requirements, who qualifies, the key deadlines and how to prepare, including where energy information overlaps with business carbon tracking.
What Is ESOS Phase 4?
The Energy Savings Opportunity Scheme is a UK-wide energy assessment scheme for large organisations that meet specific qualification criteria.
Its purpose is to help businesses understand how energy is used across their operations and identify opportunities to improve efficiency.
ESOS assessments consider energy consumption across relevant activities, including:
Buildings: Electricity, heating and other energy used in offices, warehouses and facilities.
Industrial processes: Energy consumed by machinery, equipment and production activities.
Transport: Fuel and other energy used for relevant business transport.
Other activities: Additional energy-consuming operations within the assessment boundary.
ESOS Phase 4 covers the fourth compliance period, from 6 December 2023 to 5 December 2027.
Although improving energy efficiency can also contribute to reducing greenhouse gas emissions, ESOS is primarily concerned with assessing energy consumption and identifying energy-saving opportunities.
It is separate from carbon reporting requirements such as Streamlined Energy and Carbon Reporting (SECR), although some of the information collected may be relevant to both.
The Environment Agency's official ESOS Phase 4 guidance explains the full requirements.
What Are the ESOS Phase 4 Deadlines?
The ESOS Phase 4 deadline most businesses will be preparing for is 5 December 2027, when qualifying organisations must submit their notification of compliance.
However, the qualification date comes earlier, and there are additional deadlines for action plans and progress reporting.
Date | Requirement |
5 December 2026 | Second annual progress update for applicable Phase 3 participants |
31 December 2026 | ESOS Phase 4 qualification date |
5 December 2027 | Phase 4 compliance notification deadline |
5 December 2028 | Phase 4 action plan submission deadline |
5 December 2029 | First Phase 4 annual progress update |
5 December 2030 | Second Phase 4 annual progress update |
5 December 2031 | Third Phase 4 annual progress update |
The 31 December 2026 qualification date determines whether your organisation falls within the fourth compliance period, subject to the scheme's rules for organisational size and corporate groups.
Businesses that qualify must generally complete their ESOS assessment and submit a notification through the government's Managing your Energy Savings Opportunity Scheme (MESOS) online system by 5 December 2027.
The later deadlines concern action plans and progress updates. These help organisations document the energy-saving measures they intend to implement and report on subsequent progress.
The action plan and progress reporting requirements generally apply to qualifying participants, with exceptions including organisations that reported zero total energy consumption.
You can find the full timeline in the official government guidance.
Who Needs to Comply With ESOS Phase 4?
ESOS Phase 4 applies to large UK undertakings and corporate groups containing a qualifying large undertaking.
An organisation generally meets the large undertaking criteria if it:
Employs 250 or more people; or
Has an annual turnover exceeding £44 million and an annual balance sheet total exceeding £38 million.
Both financial thresholds must be exceeded for the financial test to apply.
However, qualification can involve more than checking the latest employee numbers or financial statements.
Corporate groups may need to participate
If one UK undertaking within a corporate group qualifies as a large undertaking, the wider UK group may also be required to participate.
This means a business with fewer than 250 employees could still be included because of its relationship with other companies.
Corporate group arrangements can be complicated, particularly where organisations have overseas parent companies or multiple UK subsidiaries.
Businesses that have grown or shrunk should check carefully
ESOS includes specific rules for businesses whose size has changed.
In some circumstances, an organisation must review consecutive accounting periods to determine whether it is considered a large undertaking.
For example, a business that has recently exceeded the thresholds may not immediately qualify, while one that has recently fallen below them may still be included.
If your organisation is close to the thresholds, has changed size or operates within a corporate group, it's worth checking the Environment Agency's qualification guidance before deciding whether ESOS applies.
What's Changed in ESOS Phase 4?
The ESOS Regulations were amended in 2026, introducing changes to the available compliance routes and the information organisations need to report.
Here are four important changes.
1. Display Energy Certificates Are No Longer an Alternative Compliance Route
In previous phases, certain Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) could be used as alternative routes to compliance.
These are no longer accepted as substitutes for ESOS energy audits in Phase 4.
However, information from these documents may still be useful as supporting data, including for some energy intensity calculations.
Businesses that previously relied on these routes should review how they will meet the Phase 4 assessment requirements.
2. ISO 50001 Remains an Accepted Compliance Route
ISO 50001 is an international standard for energy management systems.
Qualifying ISO 50001 certification can be used as an alternative compliance route for energy consumption covered by the certification.
Where the certification meets the relevant requirements and covers the necessary energy consumption, an organisation may not need a separate ESOS energy audit or lead assessor.
Businesses must still check the certification's validity, coverage and any remaining obligations.
3. Previous ESOS Action Plans Must Be Reviewed
ESOS Phase 4 introduces a requirement for applicable participants to review previous action plan commitments as part of their ESOS report and compliance notification.
This includes identifying relevant measures that were not implemented and explaining why.
For businesses that participated in Phase 3, reviewing previous recommendations and the decisions made since then is an important part of preparation.
4. Additional Information About Energy Savings Is Required
Phase 4 introduces additional reporting requirements concerning energy-saving measures implemented during the compliance period.
These include information about relevant measures, their categories and estimates of the energy savings achieved.
Keeping records of completed projects, supporting calculations and the assumptions behind estimates can help businesses prepare this information.
The full requirements and applicable exceptions are explained in the Environment Agency's ESOS Phase 4 guidance.
How Can Businesses Prepare for ESOS Phase 4?
Preparing for ESOS starts with understanding where energy is consumed and where the relevant information is held.
For many businesses, this information may be spread across different teams. Electricity bills might sit with finance, vehicle fuel records with operations and building information with facilities managers.
Bringing these records together is a practical starting point for an energy assessment and can also help businesses develop a clearer understanding of their emissions.
1. Gather Your Energy Consumption Data
Begin by identifying the energy used across the parts of your organisation covered by ESOS.
Depending on your operations, this could include:
Electricity and gas consumption
Heating fuels
Company vehicle fuel use
Energy consumed by machinery and industrial processes
Relevant business transport energy
Consumption across multiple buildings or locations
It's worth checking what information your business already holds before starting a new data collection process.
Utility bills, fuel records and existing operational systems may already contain much of the information you need.
Our guide to carbon data sources businesses already have explores where useful information can be found.
2. Identify Your Significant Energy Consumption
ESOS Phase 4 requires organisations to identify areas of significant energy consumption that together account for at least 95% of total energy consumption.
These areas must be covered by an appropriate assessment or qualifying compliance route. Organisations can also choose to assess all their energy consumption.
For example, a logistics business may find that vehicle fuel and warehouse energy use account for much of its total consumption.
An office-based organisation may have a different energy profile, with electricity and heating accounting for a larger share.
Understanding these differences helps businesses plan their assessments and identify where detailed investigation may be useful.
3. Understand Energy Intensity Ratios
An energy intensity ratio compares energy consumption with a relevant measure of business activity.
For example, a business might compare the energy used to heat and power a building with its floor area.
A transport business might use an appropriate measure involving distance travelled and the amount of goods or passengers carried.
These comparisons help put energy consumption into context, rather than looking only at total energy use.
ESOS has specific requirements for calculating energy intensity ratios, so businesses should follow the official methodology rather than choosing an arbitrary comparison.
4. Check the Quality of Your Energy Records
Collecting energy information is only one part of preparation. Businesses also need to understand whether their records are complete, consistent and supported by evidence.
For example, electricity consumption may be recorded in kilowatt-hours, while fuel purchases may be recorded in litres. These figures need to be converted appropriately when calculating energy consumption.
It's useful to review whether:
Energy records cover the relevant sites and activities.
Units of measurement are consistent or can be converted correctly.
Missing information has been identified.
Estimates and assumptions are documented.
Supporting evidence is available.
Responsibilities for collecting information are clear.
Not every business will have complete records immediately, particularly when data comes from several locations or teams.
Identifying gaps early provides time to establish an appropriate approach before the assessment deadline.
For broader guidance on emissions measurement, read our articles on improving carbon data quality and when carbon emissions can be estimated.
These explain useful data management principles, although estimates used for ESOS must follow the scheme's specific requirements.
5. Review Previous ESOS Assessments and Action Plans
Businesses that participated in earlier ESOS phases should revisit their previous assessments and action plans.
Consider which energy-saving opportunities were identified, which measures were implemented and whether records of the estimated savings are available.
It is also worth reviewing measures that were postponed or not implemented, including the reasons behind those decisions.
This information can support the Phase 4 action plan review and help organisations understand how their approach to energy management has developed.
6. Plan Your Assessment and Responsibilities
Businesses expecting to qualify should establish which compliance route applies.
This may involve an ESOS energy audit, qualifying ISO 50001 certification or an appropriate combination.
Where an ESOS lead assessor is required, they must be registered with an approved professional body. A lead assessor is a suitably qualified professional who reviews the assessment to help ensure it meets the scheme's requirements.
Businesses should also identify who will coordinate data collection, communicate with the assessor, review the findings and manage the compliance notification.
Planning these responsibilities early can make the process easier to manage across departments and locations.
ESOS Phase 4 Preparation Checklist
If your organisation is approaching the qualification thresholds, this checklist can help organise your next steps.
Review employee numbers, turnover and balance sheet figures against the ESOS qualification criteria.
Check whether corporate group arrangements affect participation.
Confirm any outstanding Phase 3 progress reporting obligations.
Identify the buildings, transport and processes relevant to your energy consumption.
Gather available electricity, gas and fuel records.
Check for missing data and document relevant assumptions.
Review previous ESOS assessments and action plans.
Determine whether an energy audit, ISO 50001 certification or combination is appropriate.
Identify who will coordinate the assessment and any required lead assessor.
Plan for the 5 December 2027 compliance notification deadline.
This checklist supports preparation but does not replace the full requirements set out in the official ESOS Phase 4 guidance.
How Does ESOS Relate to Carbon Reporting?
ESOS and carbon reporting both involve collecting information about business activities, but they serve different purposes.
ESOS focuses on energy consumption and identifying opportunities to improve energy efficiency.
Carbon reporting focuses on greenhouse gas emissions associated with business activities.
ESOS | Carbon reporting |
Assesses energy consumption and efficiency opportunities | Measures greenhouse gas emissions |
Applies to organisations meeting ESOS qualification criteria | May be mandatory or voluntary, depending on the framework |
Covers relevant energy use in buildings, processes and transport | May include Scope 1, 2 and 3 emissions |
Requires specific assessments and compliance notifications | Follows the requirements of the relevant reporting framework |
Identifies potential energy-saving measures | Helps businesses understand and report emissions |
There can be useful overlap in the information businesses collect.
For example, electricity consumption data may be relevant to an ESOS assessment and to calculating Scope 2 emissions.
Similarly, fuel consumed by company-owned vehicles may be relevant to an ESOS assessment and to calculating Scope 1 emissions.
However, the calculations, reporting boundaries and formal requirements are not identical.
An ESOS assessment does not automatically provide a complete greenhouse gas inventory, and carbon tracking does not replace the scheme's formal assessment requirements.
If you're new to emissions measurement, our guide to Scope 1, 2 and 3 emissions explains the different categories and how they relate to everyday business activities.
You can also explore our annual carbon emission reporting guide to understand how emissions reporting differs from ESOS.
How Scope Carbon Tracking Supports Business Emissions Measurement
Although ESOS focuses on energy assessment, collecting information about energy use is also relevant to understanding a business's carbon footprint.
Electricity, gas and fuel consumption are examples of activity data that can be used to calculate greenhouse gas emissions.
At Scope Carbon Tracking, our focus is helping businesses measure and track emissions associated with their operations.
For organisations getting started, a useful approach is to identify which activities need to be measured, what information is already available and where estimates or additional data collection may be needed.
For example, electricity bills and vehicle fuel records may already be available within the business. The challenge is often bringing the relevant information together and understanding how it relates to different emissions sources.
Our Business Carbon Tracking offering supports businesses looking to develop a clearer understanding of their operational emissions.
For businesses already gathering energy information for ESOS, some of that activity data may also be relevant to carbon measurement, provided it is suitable for the calculations being carried out.
Scope Carbon Tracking is not an ESOS assessment or compliance service, and the software does not replace an ESOS energy audit, registered lead assessor or formal compliance notification.
If you're at an earlier stage of measuring your business emissions, our Business Carbon Calculator is another place to explore how carbon footprint measurement works.
ESOS Phase 4 FAQs
When is the ESOS Phase 4 qualification date?
The ESOS Phase 4 qualification date is 31 December 2026. Organisations must determine whether they meet the scheme's criteria on this date, taking account of the relevant accounting-period and corporate group rules.
What is the ESOS Phase 4 compliance deadline?
The ESOS Phase 4 compliance deadline is 5 December 2027. Qualifying organisations must complete the relevant assessment requirements and submit their notification of compliance through MESOS by this date.
Do businesses with fewer than 250 employees need to comply with ESOS?
Businesses with fewer than 250 employees may still need to comply with ESOS if they meet both financial thresholds or belong to a qualifying corporate group.
The full qualification rules should be checked before deciding whether an organisation needs to participate.
Is ESOS Phase 4 the same as SECR?
ESOS Phase 4 and SECR are separate schemes. ESOS focuses on energy assessments and efficiency opportunities, while SECR requires specified organisations to disclose energy and emissions information in their annual corporate reporting.
Some businesses have obligations under both schemes, but meeting one set of requirements does not automatically satisfy the other.
Does ESOS Phase 4 require businesses to implement every energy-saving recommendation?
ESOS Phase 4 does not generally require businesses to implement every recommendation identified in an energy assessment.
However, applicable participants must prepare action plans and report on progress. Phase 4 also includes requirements to review relevant previous commitments and explain why certain measures were not implemented.
Can carbon tracking software replace an ESOS energy audit?
Carbon tracking software cannot replace an ESOS energy audit or the scheme's other formal compliance requirements.
It may help businesses understand emissions associated with energy use, but qualifying organisations must follow the specific ESOS assessment, sign-off and notification requirements.
When is the ESOS Phase 4 action plan due?
The ESOS Phase 4 action plan deadline is 5 December 2028. Applicable participants must then submit annual progress updates in 2029, 2030 and 2031.
Preparing for ESOS Phase 4 Starts With Understanding Your Energy Data
With the 31 December 2026 qualification date approaching, UK businesses should establish whether ESOS Phase 4 applies to them and what they need to prepare before the December 2027 compliance deadline.
Reviewing energy records, previous assessments and internal responsibilities can help organisations approach the process with a clearer understanding of what is required.
Energy data can also be useful beyond ESOS. Electricity, gas and fuel information may support businesses looking to measure the greenhouse gas emissions associated with their operations.
If you're exploring how to measure and track your organisation's carbon footprint, learn more about Scope Business Carbon Tracking and how we support business emissions measurement.
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