Guide
SECR and ESOS - energy and carbon reporting
Mandatory energy and emissions reporting requirements for large companies and LLPs.
Large UK organisations face mandatory requirements to report energy use and carbon emissions. The two main schemes are SECR (annual reporting in accounts) and ESOS (four-yearly energy audits).
Who do these requirements apply to?
Different thresholds apply to each scheme:
- SECR - quoted companies
- All companies quoted on UK, EU, or NY stock exchanges. Must report global energy and emissions.
- SECR - large unquoted
- Meet 2 of 3 - turnover £36m+, balance sheet £18m+, 250+ employees
- SECR - large LLPs
- Same thresholds as large unquoted companies
- ESOS
- 250+ employees OR turnover £44m+ AND balance sheet £38m+ (corporate group rules apply)
- Low energy exemption (SECR)
- Companies using under 40,000 kWh/year can claim exemption
What SECR requires you to report
In your Directors' Report, you must disclose:
- Energy use: Total UK energy consumption in kWh (electricity, gas, transport fuel)
- Greenhouse gas emissions: Related emissions in tonnes of CO2 equivalent (tCO2e)
- Intensity ratio: Emissions relative to an appropriate business metric (e.g., tCO2e per £m turnover)
- Methodology: How you calculated your figures
- Energy efficiency measures: Actions taken during the year to improve efficiency
Quoted vs unquoted companies
Quoted companies must report global Scope 1 and 2 emissions plus an intensity ratio.
Large unquoted companies report UK energy and emissions only.
ESOS requirements
ESOS is a four-yearly energy audit requirement. You must:
- Measure your total energy consumption
- Conduct energy audits covering at least 95% of that consumption
- Identify energy saving opportunities
- Have a Lead Assessor sign off your compliance
- Notify the Environment Agency by the deadline
ESOS Phase 3 (now closed)
The Phase 3 deadline was 5 June 2024. Organisations that failed to comply are subject to enforcement action and should contact the Environment Agency immediately.
ESOS Phase 4 (current)
The compliance period runs from 6 December 2023 to 5 December 2027. The qualification date is 31 December 2026. Start planning early - finding Lead Assessors becomes difficult near deadlines.
ISO 50001 alternative
If you have ISO 50001 certification covering 100% of your energy use, you're exempt from the ESOS audit requirement (still need to notify Environment Agency).
Penalties for non-compliance
SECR penalties
Failure to include required SECR disclosures in your Directors' Report is a breach of company law. Directors can face personal liability.
ESOS penalties
- Failure to notify
- Up to £5,000, plus up to £500/day continued non-compliance
- Failure to conduct audit
- Up to £50,000, plus up to £500 per day for continued non-compliance (maximum 80 working days, total potential penalty £90,000)
- Providing false information
- Up to £50,000
- Publication
- Organisation name may be published as non-compliant
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Determine if SECR applies
Check if you meet 2 of 3 thresholds (£36m turnover, £18m balance sheet, 250 employees) or are quoted.
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Determine if ESOS applies
250+ employees OR turnover £44m+ AND balance sheet £38m+. Consider corporate group.
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Gather energy data
Collect 12 months of electricity, gas, and transport fuel data. Consider energy management software.
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Calculate emissions
Use UK Government GHG conversion factors to convert energy use to tCO2e.
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Include in Directors' Report (SECR)
Add required disclosures to your annual accounts - energy, emissions, intensity ratio, actions.
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Appoint Lead Assessor (ESOS)
Find a registered Lead Assessor well before the deadline - they get busy near compliance dates.
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Notify Environment Agency (ESOS)
Submit compliance notification online by the deadline.