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
-
Determine if SECR applies
Check if you meet 2 of 3 thresholds (£36m turnover, £18m balance sheet, 250 employees) or are quoted.
-
Determine if ESOS applies
250+ employees OR turnover £44m+ AND balance sheet £38m+. Consider corporate group.
-
Gather energy data
Collect 12 months of electricity, gas, and transport fuel data. Consider energy management software.
-
Calculate emissions
Use UK Government GHG conversion factors to convert energy use to tCO2e.
-
Include in Directors' Report (SECR)
Add required disclosures to your annual accounts - energy, emissions, intensity ratio, actions.
-
Appoint Lead Assessor (ESOS)
Find a registered Lead Assessor well before the deadline - they get busy near compliance dates.
-
Notify Environment Agency (ESOS)
Submit compliance notification online by the deadline.
Legal basis
Primary legislation and key regulations