ESOS and Carbon Reporting: What UK Businesses Need to Know
What Is ESOS and Who Does It Apply To?
ESOS (Energy Savings Opportunity Scheme) is a mandatory UK energy audit programme requiring large UK organisations to assess their energy use and identify cost-effective energy saving opportunities every 4 years. It is administered by the Environment Agency and applies to organisations that meet at least one of:
- 250 or more employees
- Annual turnover above £44 million and balance sheet above £38 million
ESOS Phase 3 compliance deadline was 5 June 2024 — covering the reference period December 2019 to December 2022. Phase 4 is expected with a compliance date in 2028.
ESOS does not directly apply to most SMEs — but as a supplier to a large UK company that is ESOS-compliant, you may receive carbon data requests that originate from their ESOS energy audit findings.
How ESOS Data Feeds Directly Into Carbon Reporting
ESOS requires a detailed energy audit across four areas: buildings, industrial processes, transport, and overall energy consumption. This audit produces:
- Total energy consumption in kWh, broken down by source (electricity, gas, fuel)
- Energy intensity benchmarks (kWh per m², kWh per £ revenue)
- Identified energy saving opportunities with estimated kWh and cost savings
This is exactly the data needed for Scope 1 and 2 carbon calculations. A company that has completed an ESOS audit already has the granular energy data required to calculate:
- Scope 1 (gas kWh or m³, diesel litres, petrol litres)
- Scope 2 (electricity kWh by site)
Converting ESOS energy data to tCO2e requires only the application of DEFRA emission factors — which DeCarbonOPS applies automatically.
ESOS Phase 3 Changes: Carbon Emissions Now Required
ESOS Phase 3 introduced a significant new requirement: organisations must now report their energy and carbon data to the Environment Agency as part of their ESOS notification. Specifically:
- Total energy consumption (kWh) across all scopes
- Total carbon emissions (tCO2e) from energy use
- Breakdown by energy source
This means large UK companies completing Phase 3 ESOS compliance are generating Scope 1 and 2 carbon figures as part of the statutory process — and these figures feed directly into SECR reporting and CSRD supply chain data.
What UK SME Suppliers Should Know About ESOS
If your large UK client mentions ESOS in their sustainability questionnaire, they are likely asking about their supply chain carbon data to complement their ESOS energy assessment. The data they want from you:
| Data Requested | Where You Find It |
|---|---|
| Annual energy consumption (kWh) | Your utility bills (electricity + gas in kWh) |
| Annual carbon emissions (tCO2e) | Calculated from consumption × DEFRA factors |
| Energy intensity | tCO2e per employee or per £M revenue |
| Energy reduction initiatives | Any efficiency projects or renewables installed |
Is ESOS Connected to SECR?
Yes. ESOS and SECR are complementary frameworks for large UK organisations:
- ESOS — mandatory energy audit every 4 years, identifying saving opportunities
- SECR — mandatory annual energy and carbon disclosure in the directors' report
An organisation complying with both ESOS and SECR will have robust energy and carbon data. SME suppliers to those organisations receive carbon data requests that are informed by this data.
Getting Carbon-Ready for UK Large Client Questionnaires
Whether your client's request originates from ESOS, SECR, or CSRD, the data they need is the same: your Scope 1, 2, and 3 emissions in tCO2e. DeCarbonOPS produces your Carbon Passport from your utility bills in 15–25 minutes — with a permanent verification URL accepted by UK procurement teams. Free for your first annual report.
Frequently Asked Questions
What is ESOS and who must comply?
ESOS (Energy Savings Opportunity Scheme) is a mandatory UK energy audit programme requiring organisations to assess their energy use every 4 years. It applies to organisations with 250+ employees, or with annual turnover above £44M and balance sheet above £38M. Most SMEs are exempt from direct ESOS compliance, but their large UK clients are required to comply and may request supplier energy data to support their assessments.
What is the ESOS Phase 3 compliance date?
ESOS Phase 3 had a compliance deadline of 5 June 2024, covering the reference period December 2019 to December 2022. Phase 4 is expected to have a compliance date in 2028. Phase 3 introduced a new requirement: organisations must now report total energy consumption and carbon emissions to the Environment Agency as part of their ESOS notification — not just identify saving opportunities.
How does ESOS data relate to SECR reporting?
ESOS and SECR are complementary UK frameworks. ESOS produces a detailed energy audit every 4 years. SECR requires annual energy and carbon disclosure in the directors' report. A large UK company completing ESOS will have granular site-level energy data (kWh by source, by building, by process) that feeds directly into their SECR carbon calculations. SME suppliers are not directly involved in either — but may receive carbon questionnaires driven by the large company's ESOS and SECR obligations.
Can a small business use ESOS energy audit data for its carbon footprint?
SMEs are not required to conduct ESOS audits. However, if your large enterprise client shares their ESOS findings with you as part of a supply chain engagement, the energy consumption data they identify for your shared processes can inform your own Scope 3 reporting. More practically: the ESOS audit framework (energy by source, by site) is exactly the data structure DeCarbonOPS uses to calculate your Carbon Passport.
What UK regulations require energy and carbon disclosure together?
UK large companies face overlapping energy and carbon disclosure obligations: ESOS (mandatory energy audit every 4 years, Phase 3 now requiring carbon reporting), SECR (mandatory annual energy and carbon in directors' report), and MEES (Minimum Energy Efficiency Standards for commercial property leases). Together these create a comprehensive UK energy and carbon reporting framework for large organisations — and a flow of supplier data requests to their SME supply chains.
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