ESOS Phase 4: What Businesses Need to Know in 2026

Originally written with expert insight from Duncan Wigney, SRD Technical Director and ESOS Lead Assessor. Updated by Tritility in October 2026 to reflect the latest ESOS Phase 4 guidance and deadlines.

ESOS Phase 4 is now firmly underway, and businesses that may fall within the scheme face two important upcoming dates.

Businesses that participated in ESOS Phase 3 have a second annual progress update due by 5 December 2026, while the Phase 4 qualification date is 31 December 2026. The Phase 4 compliance deadline then follows on 5 December 2027.

There have also been important changes to the scheme. New Phase 4 guidance published by the Environment Agency in July 2026 introduced changes to compliance routes and reporting requirements, placing greater emphasis on what businesses have actually done with the energy-saving opportunities identified through ESOS.

For qualifying organisations, this makes now a good time to understand what has changed, check your responsibilities and start preparing rather than waiting until the compliance deadline approaches.

What is ESOS?

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for large UK organisations.

Qualifying businesses must complete an assessment every four years, looking at the energy used across their buildings, industrial processes and transport. The purpose is not simply to measure consumption, but to identify practical and cost-effective opportunities to save energy, carbon and money.

Used effectively, an ESOS assessment can therefore be more than a compliance exercise. It can provide businesses with a clearer picture of where energy is being consumed unnecessarily and where efficiency improvements could deliver meaningful savings.

Does ESOS Phase 4 apply to your business?

Your organisation qualifies for ESOS Phase 4 if it meets the definition of a large undertaking on 31 December 2026.

A UK organisation is considered a large undertaking if it either:

• employs 250 or more people, or
• has an annual turnover of more than £44 million and an annual balance sheet total of more than £38 million.

Corporate structures also matter.

If at least one UK organisation within a corporate group meets the definition of a large undertaking, the corporate group can qualify for ESOS. Organisations close to the thresholds, or those that have grown or reduced significantly in size, should check the detailed qualification rules rather than assuming they are inside or outside the scheme.

If you’re unsure whether your organisation or wider group qualifies, establishing this early gives you more time to prepare if ESOS does apply.

What has changed for ESOS Phase 4?

Phase 4 runs through to the compliance deadline on 5 December 2027, but the latest amendments have introduced several important changes.

1. DECs and Green Deal Assessments are no longer compliance routes

Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) can no longer be used as alternative routes to ESOS compliance.

For Phase 4, businesses must cover their relevant energy consumption through ESOS energy audits, ISO 50001 certification, or a combination of the applicable routes.

2. Progress against your previous action plan matters

Phase 4 places greater emphasis on what happened after your previous ESOS assessment.

Where an organisation produced a Phase 3 action plan, its Phase 4 reporting must identify measures that were proposed but not implemented and explain why they were not completed.

This means businesses should not view their previous action plan as something that can simply be filed away once submitted.

3. Businesses need to provide more information about energy savings

Phase 4 reporting requires greater detail about energy savings achieved during the compliance period.

This includes information about measures that have been implemented, the estimated energy savings associated with individual measures and the relevant energy-saving categories.

For businesses, maintaining good records of improvements and their results should make this process considerably easier.

4. ESOS is simpler for some ISO 50001-certified organisations

There are reduced obligations for organisations complying exclusively through ISO 50001 where certification covers their total or significant energy consumption, as applicable.

In these circumstances, an organisation does not need to produce an ESOS report or appoint a lead assessor, although it still has ESOS notification obligations.

What about the proposed net zero requirements?

Mandatory net zero assessments have not been introduced for ESOS Phase 4.

Businesses can, however, voluntarily incorporate net zero considerations into their assessment using the relevant BSI standards referenced in the government guidance.

There can be a practical advantage to looking beyond minimum compliance.

ESOS can identify opportunities to reduce energy consumption, while a wider net zero strategy can help organisations understand how those improvements contribute towards longer-term carbon reduction objectives.

For businesses already collecting energy and emissions data, bringing these activities together can help turn compliance work into something more strategically useful.

Key ESOS deadlines for businesses

There are several dates organisations should have in their diaries:

Date	ESOS milestone
5 December 2026	Second Phase 3 annual progress update due
31 December 2026	Phase 4 qualification date
5 December 2027	Phase 4 notification of compliance deadline
5 December 2028	Phase 4 action plan deadline
5 December 2029	First Phase 4 annual progress update
5 December 2030	Second Phase 4 annual progress update

The immediate priority for organisations that participated in Phase 3 is the annual progress update due by 5 December 2026. This must be signed off at board level, or equivalent, and submitted through the Manage your Energy Savings Opportunity Scheme Reporting service (MESOS).

For Phase 4, qualification is assessed on 31 December 2026, with qualifying organisations then required to complete their assessment and submit their notification of compliance by 5 December 2027.

Why waiting until 2027 could make ESOS harder

The compliance notification may not be due until December 2027, but there are good practical reasons to start preparing earlier.

An ESOS assessment involves understanding your total energy consumption, identifying areas of significant energy consumption, deciding on the appropriate route to compliance and completing any necessary energy audits.

The audit process can cover buildings, industrial processes and transport, and compliant energy audits include requirements around consumption data, analysis, energy-saving opportunities and site visits.

For organisations with multiple sites, complex corporate structures or significant energy consumption, gathering and validating the necessary information can therefore take time.

Starting earlier also gives your organisation more opportunity to use the assessment as intended: identifying energy-saving measures that could improve efficiency and reduce costs rather than treating ESOS solely as a deadline to meet.

For organisations operating across multiple locations, having a clearer view of consumption across the estate can also make it easier to identify where action is likely to have the greatest impact.

Use ESOS to drive strategy, not just compliance

The real value of ESOS lies in what businesses do with the information it produces.

A good assessment can highlight inefficient equipment, unnecessary consumption, operational improvements and other opportunities to reduce energy use.

For businesses with wider sustainability commitments, the same information can also help inform energy management and carbon-reduction plans.

This can be particularly valuable for energy-intensive sectors such as manufacturing, where energy efficiency and longer-term decarbonisation often need to be considered together.

Net Zero Roadmap for UK Manufacturers provides further guidance for manufacturing businesses looking at ESOS alongside their wider energy and net zero plans.

Rather than thinking of ESOS as a report that needs completing every four years, businesses can use it as part of an ongoing process:

measure → identify → prioritise → implement → monitor → improve

That makes the exercise much more commercially useful.

ESOS Phase 4 FAQs

What are the penalties for failing to comply with ESOS?

ESOS is a mandatory scheme and regulators can impose civil sanctions, including financial penalties, where organisations fail to meet their obligations.

Enforcement depends on the nature of the breach, so businesses should refer to the Environment Agency’s current enforcement and sanctions policy for the applicable penalties.

Do I need an ESOS lead assessor?

In most cases where an organisation is completing an ESOS assessment, a lead assessor is required.

There are exceptions. For example, a lead assessor is not required where total energy consumption is below 40,000 kWh or where the relevant total or significant energy consumption is covered by qualifying ISO 50001 certification.

What energy does ESOS cover?

ESOS looks at energy consumed by assets held or activities carried out by the organisation or corporate group. This can include energy used by buildings, industrial processes and transport.

Organisations must identify the areas of significant energy consumption that need to be covered by an audit or another permitted compliance route. These areas must account for at least 95% of total energy consumption.

Can we use our SECR data for ESOS?

Existing energy and emissions data can provide a useful starting point when preparing for ESOS, but organisations should not assume that completing their Streamlined Energy and Carbon Reporting (SECR) obligations automatically satisfies ESOS requirements.

The schemes have different requirements, so businesses should assess their ESOS obligations separately.

Can we reuse our Phase 3 energy audits?

Potentially, but only where the audit meets the Phase 4 requirements and falls within the permitted timescales.

The current Phase 4 guidance specifies requirements around the period covered by consumption data and when an audit can be carried out, so businesses should check an existing audit against the current rules before relying on it for Phase 4.

What should businesses do now?

With the next major ESOS dates approaching, businesses do not need to wait until the end of 2026 to start preparing.

A sensible starting point is to:

1. Confirm whether your organisation or corporate group is likely to qualify for Phase 4.
2. Make sure your Phase 3 progress update is ready for 5 December 2026, if applicable.
3. Review the energy data you already hold and identify any gaps.
4. Review progress against your Phase 3 action plan and record what has and has not been implemented.
5. Consider your Phase 4 compliance route and whether you will need a lead assessor.
6. Start thinking about ESOS recommendations as practical energy-saving opportunities rather than simply reporting requirements

The earlier these pieces are in place, the easier it becomes to approach Phase 4 in a structured way.

How Tritility can help with ESOS Phase 4

The businesses that get the most from ESOS are those that start with good data and use the findings to inform practical action.

Tritility can help businesses understand their energy consumption, bring together the data needed to support their ESOS preparations, monitor progress against energy-saving measures and identify opportunities to reduce unnecessary consumption.

Our approach is focused on making a complex area easier to manage, with expert support and data-led recommendations that help businesses move from compliance requirements to practical energy improvements.

If you’d like to start preparing for ESOS Phase 4, speak to the Tritility team today.