Is your business ready for ESOS Phase 4?
At Orbis Advisory, we understand that organisations have many competing priorities, and environmental reporting obligations are often left until the final stages. With the introduction of ESOS Phase 4, delayed or incomplete compliance could result in increased costs and significant financial penalties.
To help you stay on track, we have prepared this cheat sheet outlining the key information you need to meet your obligations. If you need any more help, please do not hesitate to contact our team.
28 August 2026
Authors
Kieran Elliff
Principal ConsultantKieran@orbisadvisory.com
Zac Rabanal-Hunt
ConsultantZac@orbisadvisory.comWhat is ESOS Phase 4?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for large UK-registered organisations. Starting in 2014, it runs in four-year compliance cycles, and is currently in the fourth Phase.
Does it apply to me?
An organisation is in scope of ESOS Phase 4 if, for the last two financial years, it meets at least one of the two criteria below:
>250 UK employees
>£44m turnover and >£38m balance sheet
~9,000 companies were in scope of ESOS Phase 3.
Important for corporate groupings: if 1 entity in your group is in scope, your entire group is in scope, regardless of whether they meet the criteria.
Who is excluded: public sector bodies that are primarily funded by taxation, such as central/local governments, NHS trusts, and educational institutions.
I have already complied with Phase 3, do I need to do anything this time?
Yes. If you meet the criteria, you must meet the compliance requirements of ESOS Phase 4, regardless of whether you did or did not fall in scope of ESOS Phase 3.
What is required?
Appoint a qualified ESOS Lead Assessor
Collect 12 months of energy data from your energy-consuming assets, for example offices that you lease or manage, company-owned vehicles, and employee business mileage in their personal cars
Your Lead Assessor will audit a representative sample of your assets
Your Lead Assessor will analyse areas of significant energy consumption and provide recommendations, with implementation costs and savings, to improve your energy efficiency
Prepare an evidence pack to show compliance against the requirements
Submit the Notification of Compliance, your Action Plan, and consequent Action Plan Updates.
If you are ISO 50001-certified, you can follow a streamlined process, rather than the above.
How can I take the most value out of ESOS Phase 4?
Start early to reduce your compliance costs – as Lead Assessors are in limited supply, their rates will go up closer to the deadline. Lock in compliance support as early as possible to secure a good rate.
Focus audits where there is the most benefit – although audits need to be representative, you can identify the sites for audit where there is the greatest potential for savings, e.g. older buildings and those where you have more control
Overlay your ESOS budget with other similar actions, such as Streamlined Energy and Carbon Reporting Obligations and your annual carbon footprint assessments. Often there are companies that can do all three in one contract.
Do not leave it too late! You could be fined between £5,000 and £90,000 if you fail to meet the ESOS Phase 4 requirements. Appointing an advisor may feel like an unnecessary cost, but they can ensure that you meet all the ESOS requirements and avoid hefty fees.
I would need to sign off budget to start with this, how do I communicate this internally?
This is compliance, it is non-negotiable that we need to do this and there could be large fines if we do not.
The purpose of this compliance is to identify and start to address inefficiencies in your energy use, and any recommendations provided will include return on investment (ROI) estimates to show the real financial savings you could achieve.
For groups, spread the load. Confirm with your colleagues in other entities that you are in scope, and agree a fair allocation of compliance fees so that it does not sit heavily on any individual entity.
What support is available?
Orbis Advisory has extensive experience supporting organisations to comply with ESOS. Speak to one of our consultants today to hear about the end-to-end, hands-on compliance service that we offer.
If you want to do your own research, see the full guidance from the UK Government here.
