These Regulations set out the Energy Savings Opportunity Scheme (ESOS), a scheme under which all large undertakings (and any small or medium undertakings which are members of the same corporate group as a large undertaking) must audit their energy use, in four-yearly cycles.
ESOS requires these undertakings to calculate their total energy use, and then to audit that use (subject to some exceptions) in each cycle. The audit must be carried out or reviewed by an approved assessor, who must analyse the undertaking’s energy consumption and energy efficiency, and identify reasonably practicable and cost effective ways in which they can improve their energy efficiency.
ESOS applies to large UK undertakings and their corporate groups. It mainly affects businesses but can also apply to not-for-profit bodies and any other non public sector undertakings that are large enough to meet the qualification criteria.
Your organisation qualified for the second compliance period if, on 31 December 2018, it met the ESOS definition of a large undertaking. Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking.
If you’re very close to the qualification threshold or have substantially increased or decreased in size in recent years, read the full guidance on complying with ESOS. This includes additional information on how to assess if you qualify.
Public sector organisations do not usually need to comply with ESOS.
Large undertakings
For the qualification date for the second compliance period (31 December 2018) a large undertaking is any UK company that either:
For the qualification date for the third compliance period (31 December 2022) a large undertaking is any UK company that either:
For your accounts, you should use the Bank of England exchange rate between the Euro and pound sterling at close of business on the qualification date.
You must take part in ESOS if your undertaking is part of a corporate group which includes another UK undertaking or UK establishment which meets these criteria.
Where a corporate group participates in ESOS, unless otherwise agreed, the highest UK parent will act as a ‘responsible undertaking’ and be responsible for ensuring the group as a whole complies.
UK registered establishments of an overseas company will also need to take part in ESOS (regardless of their size) if any other part of their global corporate group activities in the UK meet the ESOS qualifying criteria.
An ‘establishment’ is a branch within the meaning of the Eleventh Company Law Directive (89/666/EEC), or a place of business that is not such a branch but where there is some degree of physical presence in the UK.
A person is employed by an undertaking if they are:
