ESOS Phase 4 Guidance Released: What Organisations Need to Do Now

The Environment Agency has published the official guidance for ESOS Phase 4, providing clarity on how the scheme will operate ahead of the December 2027 compliance deadline. The guidance confirms a number of changes that reinforce the government’s intention to make ESOS more than a periodic compliance exercise and place greater emphasis on delivering energy efficiency improvements.

If your organisation is in scope, ESOS is no longer just about completing an assessment every four years. You will need to show what you’ve done with the findings, track progress and demonstrate results.

Organisations that start early can use Phase 4 to strengthen energy data, reduce operating costs, support wider sustainability objectives, and improve decision-making across the business.

Four key changes in ESOS Phase 4

The latest guidance confirms several important changes that had already been discussed, as well as introduces a few new ones.

Here’s a summary of the top four:

1. You’ll need a more robust route to compliance

Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) can no longer be used as standalone compliance routes.

This means organisations will generally need to comply through:

• ESOS energy audits, or
• ISO 50001 certification

The aim is to ensure organisations receive recommendations that are specific to their operations and support meaningful energy performance improvements.

2. You’ll need to show what action you’ve taken

There is now an increased focus on what organisations actually do with the findings from their ESOS assessments.

Phase 4 requires organisations to:

• Report energy efficiency measures that have been implemented.
• Quantify energy savings achieved.
• Explain energy-saving initiatives undertaken during the compliance period.
• Review progress against previous Action Plans.
• Explain why any committed actions have not been delivered.

3. Progress reporting doesn’t stop at submission

Phase 4 introduces an additional Annual Progress Update, with a third update due by 5^th December 2031.

This reinforces a broader emerging trend across energy and sustainability regulations: organisations are increasingly being expected to evidence continuous improvement rather than to ‘report and forget’ at each compliance deadline.

4. ISO 50001 can reduce some ESOS requirements

For organisations whose ISO 50001 certification covers all relevant energy consumption, certain ESOS requirements have now been reduced, including the requirement for an ESOS report and Lead Assessor involvement.

The bigger message: ESOS is becoming a delivery programme

Perhaps the most important takeaway from the new guidance is that ESOS is no longer evolving as a standalone audit exercise.

The direction of travel is clear:

• More emphasis on implementation.
• More scrutiny of delivered outcomes.
• Better quality energy data.
• Stronger governance and accountability.

Many organisations still view ESOS primarily as a compliance obligation. Phase 4 strengthens the case for treating it as part of a wider energy management strategy. Done well, it can support energy efficiency, decarbonisation and compliance objectives while helping teams make better-informed decisions.

Three actions to take now

1. Check the quality of your energy data

One of the most common challenges in ESOS is obtaining complete, accurate and sufficiently detailed energy data. Poor quality data can delay assessments, limit insights and reduce confidence in opportunities identified during audits.

There is no better time to:

• Review your energy data collection processes.
• Identify gaps in your building and transport activity data.
• Improve consistency across your sites and business units.
• Consider opportunities for sub-metering and enhanced monitoring.

2. Create clear ownership

The new requirements place greater emphasis on evidencing progress and implementation. This means ESOS is no longer solely the responsibility of your finance team.

Successful organisations often involve:

• Facilities teams
• Estates teams
• Finance
• Procurement
• Operations
• Sustainability and ESG functions

Clear ownership makes it easier to manage compliance requirements and turn recommendations into action.

3. Build a plan before you need one

One of the biggest mistakes organisations make is treating ESOS as a deadline-driven exercise. While the Phase 4 submission deadline is December 2027, many of the activities required for a successful submission, from confirming organisational boundaries to coordinating site visits and engaging stakeholders, can take much longer than expected.

Early preparation gives you time to:

• Improve energy data quality before the assessment begins.
• Secure access to audit resources and Lead Assessors.
• Engage operational teams without the pressure of looming deadlines.
• Identify and implement energy-saving opportunities sooner – begin delivering savings before the compliance deadline arrives.

The organisations that gain the most value from ESOS are often those that view it as a multi-year improvement programme, not a project that starts a few months before submission.

Use ESOS to make better business decisions

Done well, ESOS can help organisations:

• Reduce operating costs.
• Improve visibility of energy consumption.
• Build more reliable energy and carbon datasets.
• Support investment planning.
• Accelerate decarbonisation programmes.
• Improve readiness for future regulatory change.

The organisations that get the most from ESOS are often those that use the process to guide decision-making, not just demonstrate compliance.

The sooner you start, the more value you’ll get

The publication of the ESOS Phase 4 guidance provides welcome clarity ahead of the next compliance cycle. The changes confirm a broader shift in focus from assessment alone to implementation, accountability and continuous improvement.

Organisations that begin preparing now will be better placed to meet compliance requirements, improve energy performance and gain more value from the process.

Need support with your ESOS Phase 4 compliance?

We support organisations through every stage of ESOS compliance, helping them navigate requirements, strengthen data quality and make the most of the opportunities the process can provide. Contact us to discuss how we can support your ESOS Phase 4 journey.