Manufacturing & Engineering Environmental compliance

SECR and ESOS - energy and carbon reporting

Mandatory energy and emissions reporting requirements for large companies and LLPs.

UK-wide
Guide summary

Large UK companies must report energy use and carbon emissions annually under SECR or conduct four-yearly audits under ESOS. Check if you meet turnover, balance sheet, or employee thresholds. Include required disclosures in your Directors' Report or face penalties.

  • SECR applies if £36m turnover OR £18m balance sheet OR 250+ employees
  • ESOS applies if 250+ employees OR £44m turnover AND £38m balance sheet
  • Report energy use, emissions, efficiency measures in Directors' Report
  • ESOS requires energy audits every 4 years by Lead Assessor
  • Low energy users (<40,000 kWh/year) can claim exemption from SECR
  • Penalties up to £50,000 for non-compliance plus £500/day
  • Notify Environment Agency for ESOS compliance by deadline
  • Use UK Government GHG conversion factors for emissions
On this page
UK-wide

Related guides in Environment & Sustainability

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:

  1. Measure your total energy consumption
  2. Conduct energy audits covering at least 95% of that consumption
  3. Identify energy saving opportunities
  4. Have a Lead Assessor sign off your compliance
  5. 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
  1. 1

    Determine if SECR applies

    Check if you meet 2 of 3 thresholds (£36m turnover, £18m balance sheet, 250 employees) or are quoted.

  2. 2

    Determine if ESOS applies

    250+ employees OR turnover £44m+ AND balance sheet £38m+. Consider corporate group.

  3. 3

    Gather energy data

    Collect 12 months of electricity, gas, and transport fuel data. Consider energy management software.

  4. 4

    Calculate emissions

    Use UK Government GHG conversion factors to convert energy use to tCO2e.

  5. 5

    Include in Directors' Report (SECR)

    Add required disclosures to your annual accounts - energy, emissions, intensity ratio, actions.

  6. 6

    Appoint Lead Assessor (ESOS)

    Find a registered Lead Assessor well before the deadline - they get busy near compliance dates.

  7. 7

    Notify Environment Agency (ESOS)

    Submit compliance notification online by the deadline.