The Energy Savings Opportunity Scheme (ESOS) is moving into its fourth phase, and while the compliance deadline might feel a long way off (5 December 2027), businesses that start preparing early will be in a far stronger position.
For directors and senior managers, Phase 4 isn’t just about ticking the regulatory box. It’s a chance to cut costs, strengthen resilience, and show real progress towards net zero.
Here’s what you need to know, and how to get ahead.
Who needs to comply?
Your organisation will fall under ESOS if, by 31 December 2026, you meet either of the following:
- 250+ employees
- Annual turnover above £44 million and balance sheet over £38 million
Corporate groups are included if any UK entity meets the criteria, and UK branches of overseas companies may also need to comply.
Key dates for ESOS Phase 4
- Qualification date: 31 December 2026
- Compliance deadline: 5 December 2027
- Annual progress updates: If your business submits an ESOS Action Plan, you’ll need to report on progress each year.
What’s different this time?
Phase 4 introduces some important changes:
- Action Plan accountability – If you submit an ESOS Action Plan, you’ll need to show progress. Missed targets will need a formal explanation.
- Voluntary Net Zero reporting – Businesses can choose to align with new PAS standards for energy and decarbonisation planning. While it’s not mandatory yet, this is a clear sign of where regulation is heading.
- Fewer compliance routes – Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) can no longer be used for compliance.
Why it matters
ESOS is a legal obligation, but that’s not the only reason to take it seriously.
Done well, ESOS audits can uncover hidden energy savings that reduce operating costs. Linking ESOS with your net zero strategy helps demonstrate leadership, strengthen stakeholder confidence, and prepare your business for future regulation.
Think of Phase 4 not just as compliance, but as a strategic opportunity.
How to get ready
- Engage at board level
ESOS reports and Action Plans need sign-off from a director. Start building governance and ownership at the top.
- Start audits early
Energy audits completed now could count towards Phase 4, saving time, duplication, and disruption later.
- Consider Net Zero alignment
Voluntary PAS standards allow you to go beyond compliance and align ESOS with your decarbonisation plans. This can put you ahead of the curve.
- Keep your evidence pack organised
A solid trail of data and documentation is vital, not only for compliance, but also for building a clear business case for investment in efficiency.
The bottom line
ESOS Phase 4 may feel like a future challenge, but businesses that prepare now will be better placed to save costs, reduce risk, and show credible progress on sustainability.
The choice is simple: treat ESOS as a tick-box exercise or turn it into a lever for long-term value.
Find out more about how to prepare for ESOS Phase 4 by getting in touch with our expert team:
0113 467 7650 | enquiries@test-consulting.co.uk
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