Since its creation in 2015, the Energy Savings Opportunity Scheme (ESOS) has gone through a number of developments, and continues to evolve. In doing so, it has moved beyond a compliance box-ticking exercise and is now a useful tool for organisations to capitalise on the benefits of energy efficiency. This includes not only driving direct cost savings, but also strengthening data processes that support emissions reductions, progress toward Net Zero, and preparation for ESOS and other tightening sustainability regulations.
Want to stay ahead of evolving ESOS requirements? Join our ESOS webinar series, kicking off on 25th June, to get expert insights, key updates, and practical tips to align compliance with your net zero goals.
ESOS changes: past to future
A number of changes to ESOS have taken place over the years, with plenty still on the horizon. The key changes are highlighted below:
- Phase 1 to 2 (2019)
- Requirements remained the same but with higher levels of scrutiny from the Environment Agency. The scheme was no longer new to every participant.
- Phase 2 to 3 (2023)
- Written ESOS reports were made mandatory
- Scope of audit coverage increased (De Minimis reduced from 10% to 5%)
- Increased reporting detail expected, e.g. energy intensity ratios
- Action Plans and Annual Progress Updates required
- Phase 3 to 4 (2027)
- Limitation of alternative compliance routes (DECs and GDAs no longer permitted)
- Audit requirements strengthened and standardised
- Action required from audits
- If actions aren’t implemented, an explanation is needed
- Voluntary Net Zero considerations
- Phase 4 to 5 (2031)
- Refocus of the scheme to cover net zero as well as energy efficiency
- While dismissed for Phase 4 changes, there have been discussions of aligning the qualification thresholds with the SECR, increasing the number of organisations covered by ESOS
Common challenges faced
From our experience working with numerous clients on their ESOS submissions, we’ve come across a handful of common obstacles that can really slow things down when it comes to efficient compliance and driving improvement. These include:
1. Regulatory complexity
The regulatory landscape around sustainability isn’t exactly known for being a walk in the park. With new legislation, updates, and overlaps between different schemes, it can be hard to stay on top of everything. This constant change often creates confusion, making it tough for organisations to be sure of what’s expected of them when it comes to ESOS reporting requirements.
2. Data challenges
Data makes up the backbone of a high quality ESOS submission, but unfortunately it’s one of the biggest pain points. We often see poor quality data, varying availability across operations, and a lack of granularity in data, particularly with transport data. Add to that inconsistent data collection and tools, and the data side of things can be bit of a headache.
3. Compliance across complete company structure
Another common challenge we see is around internal communication and knowledge gaps. Many businesses struggle to coordinate across their full organisational structure, especially when it comes to identifying which parts of the company need to be included in the scope of the ESOS assessment. We’ve seen cases where scoping exercises are carried out incorrectly, which leads to compliance issues down the line.
4. Resource constraints
It’s perhaps unsurprising that sustainability initiatives often compete with other business priorities for time and budget. Many companies simply don’t have enough staff, budget or internal expertise to manage ESOS submissions smoothly.
5. Submission responsibilities unclear
Finally, we’ve found there can be confusion around the actual submission process itself. The use of the online portal can lead to access issues or technical problems if staff aren’t familiar with the system. On top of that, the requirement for Director-level approval before submission can sometimes cause bottlenecks, especially if left to the last minute. These delays can push organisations close to the submission deadline, increasing the risk of non-compliance.
Emerging themes in ESOS
We’re also seeing some clear emerging themes when it comes to ESOS and similar regulations. More than ever, there’s an expectation for accurate, asset-level data on energy use. Compliance is increasingly reliant on operational insight from Estates and Facilities teams, and often requires close collaboration with landlords to get the full picture.
Plus, with a shift away from the 4-year cycle toward annual reporting, one-off efforts are no longer sufficient. What’s needed now is consistent, high quality data that supports both compliance and longer-term strategy.
Leveraging ESOS as an opportunity for improvement
Whilst ESOS can sometimes feel like another compliance hurdle, it’s a great opportunity to drive real improvement. With regulations tightening up across the board, not just ESOS, it’s time to treat this as more than a tick-boxing exercise.
Getting ahead of the curve with ESOS doesn’t just keep you compliant, it also helps future-proof your organisation against upcoming regulatory requirements, and allows you to align your compliance strategy with your Net Zero goals, and those of the UK as a whole. And don’t forget, energy savings uncovered through the ESOS process often translate directly into cost reductions.
What’s next for ESOS?
Looking ahead, the next big milestone in the ESOS timeline is the first Annual Progress Update. The online submission portal is due to open in mid-June, giving organisations the opportunity to start uploading their first updates ahead of the final deadline on 5 December 2025.
To help you navigate ESOS, we’re hosting a webinar on 25th June. This will be the first in a series of sessions designed to guide you through what’s needed, share practical advice and answer your questions. Whether you’ve been complying since Phase 1, are gearing up for your first submission, or simply want to stay on top sustainability regulations, this webinar is a great place to start.
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