ESOS · SECR · two instruments side by side
ESOS vs SECR
ESOS and SECR both reach large organisations’ energy use, and they qualify them on different tests: ESOS either-or (Sch 1 ¶1), SECR two of three (Sch 7 ¶20B).
ESOS is an assessment every four years, notified to the Environment Agency; SECR is a disclosure every year, in the annual report.
A company can be in both, in one, or in neither, and the energy data behind them is the same.
Side by side
The two regimes on one table
Everything on this table traces to one of two instruments: SI 2014/1643 for ESOS, and SI 2008/410 Schedule 7 (inserted by SI 2018/1155) for SECR.
Module 02 / 04
Who
Module 03 / 04
Size test
Module 04 / 04
What it asks for
Read the detailed guidance and evidence
| ESOS | SECR | |
|---|---|---|
| Instrument | SI 2014/1643 | SI 2018/1155 → SI 2008/410 Sch 7 |
| Who | UK large undertakings and their UK group members | Quoted companies; large unquoted companies; large LLPs |
| Size test | At least 250 employees, or turnover over £44m and balance sheet over £38m | Exceed two of £36m turnover, £18m balance sheet, 250 employees (unquoted and LLPs) |
| What it asks for | An ESOS assessment of energy use and savings opportunities, then an action plan | Energy use, emissions, a ratio, methodology, comparatives and efficiency measures |
| Cycle | Four-yearly phases, fixed dates | Every financial year, on the accounts clock |
| Where it goes | Notification to the Environment Agency | Directors’ report, or an LLP’s energy and carbon report |
| Sign-off | One or two responsible officers, by lead assessor independence | Board approval of the directors’ report |
| Enforcement | Civil penalties, SI 2014/1643 Part 8 | Companies Act offences and revision |
The tests
Either-or against two of three
Module 01 / 04
Key point 01
Module 02 / 04
Key point 02
Module 03 / 04
Key point 03
Module 04 / 04
Reliefs
ESOS, Sch 1 ¶1(a), verbatim
“a ‘large undertaking’ means an undertaking which either— (i) employs at least 250 persons, or (ii) has an annual turnover in excess of amount A and an annual balance sheet total in excess of amount B”
SECR, Sch 7 ¶20B(2), verbatim
Exempt where the company satisfies “two or more” of: turnover “not more than £36 million”; balance sheet total “not more than £18 million”; employees “not more than 250”.
Sources: SI 2014/1643 Sch 1 ¶1(a), ¶1A; SI 2008/410 Sch 7 ¶20B.
Read the detailed guidance and evidence
ESOS asks one of two questions: does the undertaking employ at least 250 people, or are both its turnover over £44 million and its balance sheet over £38 million?
The money amounts are fixed in sterling at Schedule 1 paragraph 1A, for qualification dates since 31 December 2020; before that they were in euros.
SECR asks how many of three limits a company exceeds: turnover of £36 million, a balance sheet of £18 million and 250 employees.
Paragraph 20B writes it as an exemption: a company within two or more of the “not more than” limits is out, so exceeding two brings it in (¶20B).
Quoted companies are in SECR with no size test at all.
The two tests produce different populations, and the examples show how.
A company with 300 employees and £20 million turnover is in ESOS on headcount alone and outside SECR, because it exceeds only one SECR limit.
A company with £40 million turnover, a £20 million balance sheet and 80 staff is in SECR and outside ESOS, because the ESOS money route needs both of its higher figures.
The SECR test is worked through on SECR reporting thresholds, and the ESOS test on ESOS Phase 4 thresholds.
Worked answer
Can a company qualify for ESOS but be exempt from SECR?
Yes: the two schemes use different legal tests, so meeting one threshold does not determine the other scheme’s outcome.
| Fictional stable non-parent unquoted company | ESOS | SECR size exemption |
|---|---|---|
| £40m turnover, £15m balance sheet, exactly 250 employees | The at-least 250-person condition is met, assuming the relevant ESOS count and two-period history support qualification. | Not-more-than 250 employees and not-more-than £18m balance sheet are two qualifying exemption conditions. |
| Why the results differ | ESOS uses headcount OR both financial limits. | SECR’s non-parent exemption uses two or more not-more-than conditions. |
| What to check before using the result | Qualification-date status, undertaking history and group participation. | First/subsequent-year conditions, parent rules and any relevant group shelter. |
The example assumes the same stable facts for at least two accounting periods, while using each regime’s own employee-count method; it is not a general conclusion for a group or a first-year business.
Module 01 / 03
ESOS
Module 02 / 03
SECR
Module 03 / 03
History
Edge cases
Where one number gives opposite answers
Module 01 / 04
250 employees
Module 02 / 04
£44m turnover
Module 03 / 04
£36m turnover
Module 04 / 04
40,000 kWh
| At exactly… | ESOS | SECR |
|---|---|---|
| 250 employees | Qualifies — “at least 250” | Within the limit — “not more than 250” |
| £44m turnover | Does not meet the money limb — “in excess of” | (Not a SECR figure) |
| £36m turnover | (Not an ESOS figure) | Within the limit — “not more than £36 million” |
| 40,000 kWh | Lead assessor still required — “less than” | Relief available — “or less”, UK only |
Read the detailed guidance and evidence
Both regimes turn on the same few numbers, and the words around them point in different directions.
At exactly 250 employees, ESOS says the undertaking employs “at least 250” and qualifies, while SECR says the company has “not more than 250” and satisfies that exemption limb.
At exactly 40,000 kWh, ESOS still requires a lead assessor, because its relief in regulation 21(3) applies to total consumption “less than 40,000 kWh” (inserted by SI 2023/1182).
SECR’s relief in ¶20D(7)(a) applies at “40,000 kWh of energy or less in the United Kingdom”, so the same company may withhold its SECR figures on a statement.
The ESOS figure has no territorial limit; the unquoted SECR one counts UK energy only.
Both regimes also look beyond a single year: ESOS keeps an undertaking large until it falls below the definition for two consecutive accounting periods (Sch 1 ¶11), and SECR changes a company’s status only after two consecutive years (¶20B(1)).
Enforcement
Civil penalties against Companies Act offences
Module 01 / 04
Failure to notify (reg 43)
Module 02 / 04
Failure to keep records (reg 44)
Module 03 / 04
Failure to carry out an assessment (reg 45)
Module 04 / 04
Failure to comply with a notice (reg 46)
| ESOS offence | Maximum | Daily |
|---|---|---|
| Failure to notify (reg 43) | £5,000 | £500 a working day, up to 80 |
| Failure to keep records (reg 44) | £5,000 plus audit costs | None |
| Failure to carry out an assessment (reg 45) | £50,000 | £500 a working day, up to 80 |
| Failure to comply with a notice (reg 46) | £5,000 | £500 a working day, up to 80 |
| False or misleading statement (reg 47) | £50,000 | None |
Read the detailed guidance and evidence
ESOS has its own civil penalty regime, in Part 8 of SI 2014/1643, with five offences and fixed maxima.
The £50,000 maxima are fixed amounts with power to impose less, and the daily amounts run for working days, capped at 80.
No penalty attaches to missing an action plan or progress update; the regulations name neither in Part 8, though the failure is published.
The Environment Agency’s enforcement and sanctions policy governs how it uses the powers.
SECR has nothing equivalent: Schedule 7 creates no offence, and a defective directors’ report is dealt with under the Companies Act.
Directors who approve a report they know does not comply, or are reckless about it, commit an offence under section 419, and a late filing brings the civil penalty under section 453.
Section 463 limits directors’ liability for statements in the directors’ report to liability to the company; it has no counterpart for an ESOS notification.
Whether each regime is compulsory is answered on is SECR mandatory? and is ESOS mandatory?
Timing
Four-yearly phases against an annual clock
Module 01 / 04
Reporting period
Module 02 / 04
Key point 02
Module 03 / 04
Reporting period · 2
Module 04 / 04
Reporting period · 3
- 6 Dec 202301
ESOS Phase 4 compliance period opens
- 31 Dec 202602
ESOS Phase 4 qualification date
Size judged on this date.
- 30 Sep 202703
SECR due for a private company, 31 Dec 2026 year end
And every year after.
- 5 Dec 202704
ESOS Phase 4 compliance date
Notification to the Environment Agency.
- 5 Dec 202805
ESOS action plan due
Read the detailed guidance and evidence
ESOS runs in compliance periods: Phase 4 runs from 6 December 2023 to 5 December 2027, with the qualification date 31 December 2026 and the compliance date 5 December 2027 (reg 4).
After the assessment comes an action plan and, for Phase 4, three annual progress updates, the last due on 5 December 2031.
SECR recurs every financial year and is filed with the accounts: nine months after the year end for a private company or LLP, six for a public company (CA 2006 s.442).
The two calendars are not coordinated; a company in both meets fixed ESOS dates while its SECR date moves with its year end.
The SECR dates are worked through on the SECR deadline page, and the late filing bands on Companies House’s page.
What each asks for
An assessment against a disclosure
Module 01 / 04
Total energy consumption, across four organi
Module 02 / 04
Audit of significant consumption — at least
Module 03 / 04
Savings opportunities, and savings achieved
Module 04 / 04
Action plan, then three progress updates
| ESOS assessment | SECR disclosure (unquoted) |
|---|---|
| Total energy consumption, across four organisational purposes | Gas, transport fuel and electricity, in kWh |
| Audit of significant consumption — at least 95% | Emissions from those three sources |
| Savings opportunities, and savings achieved | At least one emissions intensity ratio |
| Action plan, then three progress updates | Methodology and the previous year’s figures |
| Energy intensity ratio per purpose | Principal efficiency measures taken, if any |
Read the detailed guidance and evidence
ESOS is about finding and acting on energy savings; SECR is about publishing energy use and emissions.
An ESOS assessment measures total energy consumption and audits the areas making up at least 95% of it, measured in energy units or spend (reg 25(2), raised from 90% by SI 2023/1182).
Phase 4 adds a record of savings actually achieved and a review of measures in the last action plan not carried out, both introduced by SI 2026/701.
The routes to compliance are an ESOS energy audit or ISO 50001 certification; Display Energy Certificates and Green Deal Assessments were removed as routes on 22 July 2026.
ISO 50001 covering total or significant consumption stands in for the lead assessor, the audit and the report, but not for the assessment duty or the notification.
SECR asks an unquoted company for energy and emissions from the combustion of gas, transport fuel and purchased electricity, with at least one intensity ratio, methodology and comparatives (¶20D).
Scope 1 and Scope 2 are the usual shorthand for SECR’s emissions, but the duty is written in the Schedule’s own words, and quoted companies owe a wider package (¶15).
Transport is scoped differently too: the ESOS guidance includes it where the organisation “is supplied with the fuel for business purposes” (§4.3.4), while SECR’s limb is the consumption of fuel for transport.
Running both
Managing both from one dataset
Module 01 / 04
Key point 01
Module 02 / 04
Reporting period
Module 03 / 04
Disclosure
Module 04 / 04
Key point 04
Meter and fuel records, collected once.
The ESOS assessment’s findings, feeding the SECR efficiency narrative.
The same conversion factor set, named by year.
Read the detailed guidance and evidence
Many large companies are in both regimes, and the energy data behind them is the same.
Collect it once, at meter and fuel-record level, and reconcile the periods: ESOS uses a twelve-month reference period that includes the qualification date, while SECR uses the financial year.
ESOS assessment output can support the SECR energy figure and the efficiency narrative, but it does not discharge the SECR disclosure.
In the years between ESOS phases SECR still needs fresh energy data every year, so a four-yearly exercise alone does not carry the annual duty.
Conversion to emissions uses the government conversion factors for the year of the activity, and the methodology statement should say which set.
The Environmental Reporting Guidelines cover the SECR side; the Environment Agency’s ESOS publications cover the other.
How the ESOS and SECR data relate to the UK standards is on ESOS and UK SRS and SECR and UK SRS.
What is not changing
Threshold alignment: not for Phase 4
Module 01 / 04
Oversight
Module 02 / 04
Oversight · 2
Module 03 / 04
Key point 03
Module 04 / 04
Proposal
The change to ESOS thresholds to align with SECR will not go ahead for Phase 4.
No Phase 5 commitment to it has been published.
Net zero requirements are a separate matter, postponed to Phase 5.
Read the detailed guidance and evidence
An earlier government response had proposed changing the ESOS qualification thresholds to align better with SECR.
The government’s ESOS page, as it read before September 2026, said that change would not go ahead for Phase 4, and no commitment to it for Phase 5 has been published.
The Phase 4 amendments in SI 2026/701, in force since 22 July 2026, left the ESOS size test untouched.
On the SECR side, the 2026 post-implementation review recommends keeping SECR with amendments and proposes no threshold change.
So the two tests will keep producing different populations for the foreseeable future.
In short
Two regimes, kept apart by design
Module 01 / 04
Run both tests separately
Module 02 / 04
Collect energy data once
Module 03 / 04
Keep two calendars
Module 04 / 04
Disclosure
Read the detailed guidance and evidence
Test
Run both tests separately
Either-or for ESOS on the qualification date; two of three, year on year, for SECR.
Data
Collect energy data once
Reconcile the ESOS reference period with the financial year.
Dates
Keep two calendars
Fixed ESOS phase dates beside a SECR date that follows the year end.
The companion ESOS pages on this site are ESOS Phase 4 thresholds and is ESOS mandatory?; the SECR ones are SECR reporting thresholds and is SECR mandatory?
SECR’s statutory home for unquoted companies is Schedule 7 Part 7A, and for LLPs regulation 12B; the Companies Act provisions behind it are in the Act itself.
To talk through where your organisation sits in both, you can book a free 15-minute call.
Frequently asked
ESOS and SECR: the questions people ask
What is the difference between ESOS and SECR?
ESOS is a four-yearly energy assessment scheme: a large undertaking audits its energy use, identifies savings and notifies the Environment Agency.
SECR is an annual disclosure: in-scope companies and LLPs put energy use and emissions in the directors’ report or energy and carbon report.
They use different size tests, different instruments and different enforcement.
What are the key differences between the ESOS and SECR thresholds?
ESOS is either-or: at least 250 employees, or turnover over £44 million and a balance sheet over £38 million together.
SECR is two of three: an unquoted company is in scope when it exceeds two of £36 million turnover, £18 million balance sheet and 250 employees.
Quoted companies are in SECR at any size.
Can a company be in ESOS and SECR at the same time?
Yes, and many large companies are.
Because the tests differ, a company can also be in only one: 300 employees and £20 million turnover puts a company in ESOS but not SECR; £40 million turnover, a £20 million balance sheet and 80 staff puts it in SECR but not ESOS.
Do ESOS and SECR have the same deadlines?
No. SECR is due with the annual accounts, nine months after the year end for a private company or LLP and six for a public company.
ESOS runs in phases with fixed dates: for Phase 4 the qualification date is 31 December 2026 and the compliance date 5 December 2027.
How do ESOS and SECR penalties differ?
ESOS has its own civil penalties, imposed by the compliance bodies: up to £5,000 for failing to notify and £50,000 for failing to carry out an assessment, each with up to £500 a working day for 80 working days, plus publication.
SECR has no penalty of its own; a defective or late directors’ report falls under the Companies Act.
Can ESOS audit data be used for SECR reporting?
It can inform it.
Both need the same energy data, and an ESOS assessment can feed the SECR energy figure and efficiency narrative, provided the periods are reconciled.
ESOS work does not discharge the annual SECR disclosure, and SECR does not satisfy ESOS.
Are ESOS and SECR thresholds being aligned?
Not for Phase 4.
The government said a change to the ESOS qualification thresholds to align better with SECR would not go ahead for Phase 4, and no Phase 5 commitment to it has been published.
SI 2026/701, the Phase 4 amendments, did not touch the ESOS thresholds.
Does the 40,000 kWh figure mean the same thing in ESOS and SECR?
No. In SECR, a company that used 40,000 kWh or less in the UK may withhold its figures on a statement.
In ESOS, a participant whose total consumption is less than 40,000 kWh need not appoint a lead assessor.
At exactly 40,000 kWh the SECR relief is available and the ESOS one is not.
Prepare the evidence
ESOS vs SECR: from a requirement to a reporting pack
Use this preparation sequence alongside the detailed requirements on this page.
An editorial workflow, not a statutory schedule.
- Stage 0101
Qualification record
Resolve the undertaking and group position at the qualification date.
- Stage 0202
Energy period
Retain the chosen reference period and its source records.
- Stage 0303
Assessment coverage
Document the audit coverage, exclusions and compliance routes used.
- Stage 0404
Assessor review
Check whether a lead assessor is needed for the chosen compliance route.
- Stage 0505
Approval and notification
Retain the applicable director sign-off and notification evidence.
- Stage 0606
Action plan
Use the assessment findings to support the applicable action plan and progress record.
Read the applicable instrument: SI 2014/1643 — the ESOS Regulations
A practical brief
An evidence pack, with a clear review trail
Ask for a pack that lets the next reviewer retrace the scope decision, follow the evidence and understand the limitations.
This describes a useful handover; it does not certify compliance or establish that a vendor or adviser delivers it.
Module 01 / 04
Applicability record
Write down the entity, reporting route and relevant period, including why the route applies.
Module 02 / 04
Evidence register
Attach each reported figure or statement to its source, method, version and limitations.
Module 03 / 04
Review trail
Name the preparer, reviewer, open questions and decisions taken before publication.
Module 04 / 04
Usable handover
Retain the working files and unresolved actions so the next reporting cycle can reuse the evidence.
View the preparation diagram
- Prepare01
Create the traceable pack
Keep the input records, calculation files and narrative together.
- Challenge02
Resolve questions before publication
Record the assumptions challenged and any limitations still unresolved.
- Retain03
Make the next cycle reproducible
Keep the approved version and the actions carried forward.
Continue your research
Related guides, one question at a time
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
- legislation.gov.ukSI 2014/1643 — the ESOS Regulations
- legislation.gov.ukSI 2014/1643 Schedule 1 ¶1, ¶1A — the large undertaking
At least 250 persons, or turnover in excess of £44m and balance sheet in excess of £38m; ¶11 the two-period retention rule.
- legislation.gov.ukSI 2014/1643 regulation 4 — compliance periods
Phase 4: 6 December 2023 to 5 December 2027; qualification date 31 December 2026; compliance date 5 December 2027.
- legislation.gov.ukSI 2014/1643 regulation 25 — significant energy consumption
95% of total consumption, by energy units or spend.
- legislation.gov.ukSI 2014/1643 Part 8 — civil penalties
Regs 43–47; no penalty attaches to the action plan or progress updates.
- legislation.gov.ukSI 2023/1182 — ESOS (Amendment) Regulations 2023
90% to 95%; the 40,000 kWh lead-assessor limb, reg 21(3).
- legislation.gov.ukSI 2026/701 — ESOS (Amendment) Regulations 2026
In force 22 July 2026: DECs and GDAs removed; savings achieved; action plan review; third progress update. Thresholds untouched.
- Environment AgencyHow to comply with the Energy Savings Opportunity Scheme (ESOS) phase 4
Published 30 July 2026; §4.3.4 transport scope.
- Environment AgencyEnergy Savings Opportunity Scheme (ESOS) — publication collection
- Environment AgencyEnforcement and sanctions policy
- legislation.gov.ukSI 2018/1155 — the SECR Regulations
In force 1 April 2019.
- legislation.gov.ukSI 2008/410 Schedule 7, paragraph 20B — the SECR size test
Exempt on two or more of turnover not more than £36m, balance sheet not more than £18m, not more than 250 employees.
- legislation.gov.ukSI 2008/410 Schedule 7, paragraph 20D — unquoted disclosures
¶20D(1)(b) transport fuel; ¶20D(7)(a) 40,000 kWh or less in the UK.
- legislation.gov.ukSI 2008/410 Schedule 7, paragraph 15 — quoted companies
- legislation.gov.ukSI 2008/410 Schedule 7, Part 7A
- legislation.gov.ukSI 2008/1911, regulation 12B — LLPs
- legislation.gov.ukCompanies Act 2006 — full text
- legislation.gov.ukCompanies Act 2006, section 419
- legislation.gov.ukCompanies Act 2006, section 442 — filing periods
- legislation.gov.ukCompanies Act 2006, section 453 — late filing penalty
- legislation.gov.ukCompanies Act 2006, section 463 — the safe harbour
- Companies HouseLate filing penalties
- DESNZ, Defra and BEISEnvironmental Reporting Guidelines, including SECR requirements
- Department for Energy Security and Net Zero2026 Post-Implementation Review of the SECR Regulations 2018
- Department for Energy Security and Net ZeroGovernment conversion factors for company reporting