What is ESOS Phase 3 and what does it mean for UK businesses?

The Energy Savings Opportunity Scheme (ESOS) is a compulsory energy assessment and efficiency scheme for large UK organisations. Phase 3, which closed for submissions in 2024, introduced a sharper focus on data quality, audit coverage and energy-saving opportunities. 

But the impact of ESOS goes beyond regulatory compliance. For forward-looking businesses, it offers a blueprint for improving energy performance, reducing operational costs and strengthening sustainability strategies. 

Understanding the current status of ESOS Phase 3 

Organisations qualified for ESOS Phase 3 if they met the eligibility criteria on 31 December 2022. This included companies with 250 or more employees, or those with an annual turnover above £44 million and a balance sheet exceeding £38 million. 

The Environment Agency extended the official compliance deadline to 5 June 2024. While some flexibility was granted to late submitters before 6 August 2024, the scheme’s reporting window is now closed. Enforcement action is ongoing and organisations that missed the deadline may be at risk of financial penalties. 

What Phase 3 changed 

Compared with previous phases, ESOS Phase 3 raised the bar across several areas: 

• Audit coverage: Businesses had to include at least 95% of their total energy use in their assessments (up from 90%) 

• Detailed metrics: Reporting required greater use of energy intensity ratios, such as kWh per square metre or per unit of output 

• Governance: Directors had to sign off the report at board level, reinforcing the strategic significance of energy management 

• Voluntary action plans: Organisations were required to submit an ESOS action plan by 5 December 2024, with the Environment Agency accepting submissions until 5 March 2025 due to system delays 

These changes reflect a shift in expectations. ESOS is no longer just about reporting, it’s about getting ready for genuine change. 

Why ESOS still matters  

The reporting deadline may have passed, but the real value of ESOS lies in what happens next. The most successful organisations are already using their audits to inform wider carbon strategies, identify operational efficiencies and guide investment decisions. 

For those who submitted, now is the time to: 

• Turn insights into measurable outcomes 

• Prioritise the most impactful energy-saving opportunities 

• Align ESOS learnings with Net Zero goals 

And for those who missed the deadline, there’s still a path forward. Getting back on track means engaging with your energy data and addressing gaps before enforcement escalates. 

Looking ahead to Phase 4 

Phase 4 of ESOS is expected to introduce further requirements, including: 

• Compulsory public disclosure of action plans 

• Annual progress reporting on implementation 

These changes are not yet in force but are expected to apply to organisations qualifying on or after 31st December 2026. 

Although alignment with Net Zero and SECR frameworks is not a compulsory element of Phase 4, businesses can choose to report on these voluntarily. Those that do will be well positioned to demonstrate climate leadership and prepare for future policy developments. 

Why accurate data makes the difference 

A common challenge in ESOS reporting is poor or incomplete data. In Phase 3, this became even more critical. High-quality, verified energy data supports confident decision-making, reduces audit risks and opens the door to real energy savings. 

Organisations relying on estimated or fragmented data often don’t see the forest through the trees. That’s why accurate, connected data is at the heart of long-term compliance and operational success. 

How TMA helps organisations go beyond compliance 

At TMA, we support energy suppliers, TPIs and end users with the insight, accuracy and assurance needed to make ESOS work harder for your business. 

Our services include: 

• End-to-end energy data reporting: Reliable data across all meter types, with tailored reporting to suit complex estates 

• Exception handling and audit support: Detailed exception reports to highlight issues early and reduce risk 

• Insight for action: Helping you prioritise opportunities, calculate savings and support wider sustainability goals 

• Preparation for Phase 4: Laying the foundations for what’s coming next, from action plans to progress tracking 

Our mission is to make energy data work for you. Whether you’re reviewing your Phase 3 outcomes or preparing for what’s ahead, we’re here to help. 

Ready to make your ESOS data work harder? 

Whether you’re reviewing your Phase 3 submission or planning for Phase 4, TMA can help turn compliance into competitive advantage. 

Speak to one of our energy data experts today!