Ruaire Glackin, Head of Net Zero and Energy Management, at Utility Aid explains some of the key reports on energy consumption and greenhouse gas emissions.

Utility Aid is the largest energy consultant for the not-for-profit sector. We offer a range of services to suit all sizes of buildings including: 

  • Finding the right energy contract for your building
  • Account Management & Support
  • Net Zero Planning
  • Carbon Reporting & ESOS Audits 

The Government has released its strategy for Net Zero, which sets out policies and proposals for decarbonizing all sectors of the UK economy to meet our net-zero targets by 2050. There are several approaches your organization can take to reach this target, but it is important to know where to start and understand the differences in the reports. This blog will outline the key differences between SECR and ESOS Reporting, the challenges you may face, and the positive outcomes that can be achieved by combining the reporting requirement. 

What is ESOS Reporting

Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. 

The Enviroment Agency is the UK scheme administator.

ESOS Criteria 

ESOS applies to large UK organisations. Whilst it affects a large number of businesses, it can also apply to not-for-profit bodies and other non-public sectors. 

For ESOS Phase 3 the criteria was as follows: 

  • Employs 250 or more people
  • Or has an annual turnover in excess of £44 million, and an annual balance sheet total in excess of £38 million.

Some of the proposed changes to ESOS Phase 4 have been postponed, including the need to cover net zero and the qualification thresholds aligning with SECR.  There are some changes intended to go ahead that include the removal of some compliance routes, inclusion of progress against action plan commitments and the need to provide explanations where commitments have not been met.  The compliance date for Phase 4 is 5th December 2027

ESOS Assessments

Organisations that qualify for ESOS must complete an assessment every 4 years that includes 

conducting energy audits of buildings, industrial processes and transport to identify the potential for energy reductions and the impact it can have on annual energy spends. 

The ESOS audit is designed to identify tailored and cost-effective measures to allow organisatons to save energy and identify feasible cost savings.  The audit costs are estimated to be significantly outweighed by the savings from implementing the recommendations.

Summary of Steps

1. Decide on your route(s) to compliance and appoint a lead assessor

2. Calculate your total energy consumption

3. Identify your areas of significant energy consumption

4. Calculate your energy intensity ratios

5. Carry out any necessary ESOS energy audits (10% of estate)

6. Complete the ESOS report and have Director sign off

7. Notify the Environment Agency

Potential Challenges around ESOS

For many organisations ESOS can be considered as an additional stress on resources, ensuring you have a knowledgeable, qualified and experienced lead assessor can reduce stress.  An ESOS submission should be a report on the annual energy consumption of the organisation and simply identify changes that could be made to reduce consumption, either through behavioral changes, additional controls or capital investments.  A large part of the cost to complete an ESOS assessment is conducting building or site audits, for national operations this can mean a lot of travel throughout the UK.  Data collection is also key as the smoother this process is the less time it will take to audit the total energy consumption of the organisation for the reporting period. 

What is SECR Reporting

Streamlined Energy and Carbon Reporting (SECR) was introduced in 2019 to replace the Carbon Reduction Commitment (CRC) scheme. 

This legislation requires qualifying companies to report on their energy consumption and greenhouse gas emissions. 

Its purpose is to increase the awareness of climate change and its impact on the world. Organisations will then be aware of their current carbon emissions and the impact of their decisions.

What are SECR Requirements

  • Around 12,000 companies qualify for SECR in the UK. 
  • You will be required to comply with SECR if you meet 2 out of 3 of the following criteria:
  • A turnover of £36m or more
  • A balance sheet of £18m or more
  • 250 employees or more

To be compliant, companies need to measure and quantify their Scope 1 and Scope 2 carbon emissions and use this data to calculate an intensity metric. Best practice is to include details of actions being implemented by companies to reduce the intensity metric over time, however this is not mandatory. The inclusion of Scope 3 emissions is not mandatory but considered the best practice where the data is available.

What is the SECR Compliance Deadline?

SECR doesn’t have a fixed deadline. However qualifying companies need to submit a compliant SECR report as part of their annual accounts. This means the ‘deadline’ date will be linked to your financial year with companies having up to 9 months to submit following the year closing out.

Things to consider around SECR

The carbon content and quantity of the energy you use will change annually, and is dependent on several factors, these could include changes to weather, productivity, generator outputs, the size of the estate and geo-political influences.  The majority of SECR reports will be based on estimated consumption data, so providing a report that uses consistent data and methodologies is essential to garner a year on year report that accurately portrays your organisations environmental impact. 

So what is is the difference between ESOS and SECR?

  • ESOS and SECR have different purposes related to reducing business’ impact on the environment. 
  • ESOS measures a business’ energy consumption, providing helpful steps to reduce it in their daily tasks. 
  • SECR calculates a business’ annual carbon footprint and provides an annual comparison. 

What is similar?

  • Both reports require 12 months of energy data and it is possible to use the same data for both reports.