Who Needs to Comply With ESOS Phase 4?
Your business must comply if, on the qualification date (31 December 2026), it:
- Employs 250 or more people, or
- Has an annual turnover of over £44 million and an annual balance sheet total of over £38 million, or
- Is part of a corporate group that meets these thresholds.
If your organisation falls under these rules, you are legally required to carry out an ESOS audit and submit your compliance notification.
What’s New in ESOS Phase 4?
Phase 4 will bring in refinements and strengthened expectations, including:
- Mandatory action plans following audits
- Increased scrutiny on data quality and evidence
- Improved alignment with Net Zero and SECR reporting
- Likely tighter deadlines and greater enforcement
While final guidance is expected soon, the message is clear: ESOS Phase 4 will be more robust, and businesses will be expected to do more than just report.
When Is the ESOS Phase 4 Deadline?
- Qualification Date: 31 December 2026
- Compliance Deadline: Expected to be 5 December 2027
While this may seem far off, early planning is crucial, especially for multi-site businesses or those needing site surveys and energy modelling.
What Are the Penalties for Non-Compliance?
Failure to comply with ESOS can lead to:
- Fines of up to £50,000
- Daily fines for ongoing non-compliance
- Reputational damage and public disclosure of non-compliance
With stricter enforcement likely in Phase 4, it’s essential to act well ahead of the deadline.
How to Prepare for ESOS Phase 4
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Check your qualification status
Review your headcount and financials as of 31 Dec 2026.
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Review your Phase 3 audit
Use it as a baseline, what improvements were recommended? Were any implemented?
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Start early
Energy data collection, audits, and reporting take time — don’t wait until 2027.
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Work with a qualified Lead Assessor
Ensure your ESOS audit is overseen by an accredited professional.
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Align with Net Zero and SECR
Integrating ESOS planning into your wider sustainability strategy helps future-proof your business.
