Manufacturing & Engineering Environmental compliance UK-wide

SECR and ESOS - energy and carbon reporting

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

Guide summary

Check if your organisation qualifies for SECR (annual carbon reporting) or ESOS (energy audits every 4 years). If you do, gather your energy data and report it in your annual accounts (SECR) or get a Lead Assessor to audit at least 95% of your energy use (ESOS). Deadlines: SECR each year with your accounts; ESOS Phase 4 deadline is 5 December 2027. Penalties for missing deadlines can reach £90,000.

  • Check SECR: quoted companies or meet 2 of 3 thresholds (£36m turnover, £18m balance sheet, 250 employees)
  • Check ESOS: 250+ employees OR turnover £44m+ AND balance sheet £38m+
  • Report UK energy use (kWh), emissions (tCO2e), intensity ratio and efficiency actions in Directors’ Report for SECR
  • ESOS: audit at least 95% of energy use, approved by a registered Lead Assessor
  • Exempt from SECR if you use less than 40,000 kWh per year
  • Exempt from ESOS audit if you hold ISO 50001 covering 100% of energy use
  • Notify Environment Agency of ESOS compliance online – Phase 4 deadline 5 December 2027
  • SECR failure is a company law breach – directors can face personal liability
  • ESOS penalties up to £50,000 plus £500 per day; false information up to £50,000
On this page

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.