ESOS Phase 4 Update: What it Means for Your Organisation

ESOS Phase 4 Update: What it Means for Your Organisation

As consultants, we understand that energy efficiency and carbon reduction are essential aspects of any business strategy. The latest update from the Department of Energy Security and Net Zero (DESNZ) regarding Phase 4 of the Energy Savings Opportunity Scheme (ESOS) has important implications for businesses aiming to meet regulatory requirements and contribute to the UK’s broader sustainability goals.

Mandatory Net Zero Requirements Delayed to Phase 5

One key development is the delay in the mandatory inclusion of net zero considerations in Phase 4 audits. Initially, Phase 4 (2023-2027) was expected to require businesses to integrate net zero strategies into their ESOS assessments. However, due to delays with Phase 3 legislation and guidance, the government has decided to postpone these requirements until Phase 5 (2027-2031). This decision allows businesses more time to prepare for the changes.

No Change To ESOS Qualification Criteria for Phase 4

The qualification criteria for Phase 4 will remain unchanged, with the qualification date set for 31 December 2026. Any proposed changes to thresholds, aimed at aligning with the Streamlined Energy and Carbon Reporting (SECR) requirements, will be reviewed as part of ongoing efforts to streamline business energy and emissions reporting.

Smaller Phase 4 Changes

Several changes are still planned for Phase 4, subject to parliamentary review:

  • Removal of Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) as valid compliance routes.
  • Companies must now need to demonstrate progress against their action plans during the assessment.
  • Where commitments have not been met, an explanation will be required.

Voluntary net zero reporting option in phase 4

For businesses looking to show a commitment to net zero, DESNZ has partnered with the British Standards Institution (BSI) to introduce two new PAS standards, which will be published on February 7, 2025:

PAS 51215-1:2025: This standard outlines the process for conducting an energy and decarbonisation assessment, integrating both energy use and carbon emissions into a comprehensive net zero implementation plan.

PAS 51215-2:2025: This standard specifies the competencies required for lead assessors and assessment teams to handle both energy efficiency and carbon emissions within the ESOS framework.

By following PAS 51215-1:2025, organisations can voluntarily include:

  • greenhouse gas (GHG) emissions related to their energy use in their ESOS assessments
  • governance and risk assessments for net zero, to achieve net zero by 2050.

Looking Ahead To Phase 5

Although the mandatory net zero requirements are postponed, businesses that choose to use the PAS 51215-1:2025 process during Phase 4 will contribute valuable feedback to ESOS, especially for Phase 5. The DESNZ plans to provide more information about the implementation of these standards and opportunities for public consultation later in the year.

As consultants committed to sustainability, we encourage businesses to continue prioritising energy management strategies in anticipation of the upcoming changes.

More News

The EU’s Latest Greenwashing Rules: What They Mean for Businesses Making Green Claims

The EU’s new greenwashing rules will introduce tighter controls on environmental claims from September 2026. Discover what businesses need to know about making credible, evidence-based green claims.

ESOS Phase 3 Progress Update 1 Data Published: What UK Organisations Need to Know

Discover the key findings from the ESOS Phase 3 Progress Update 1 data, including energy-saving measures, compliance rates and what UK organisations need to do next.

New minimum energy standards are on the way

New minimum energy standards are on the way for 2031 where rented and leased buildings over 1,000 square metres will need to achieve a higher energy efficiency rating of EPC band B, where it is deemed cost-effective. We discuss the benefits, what this means for ISO standards, the key proposals and how Survey and Test can help you navigate and prepare for the changes.

ISO 14001 case study: The Bar Council of England and Wales

Environmental Management for Ashurst LLP

Working with Ashurst LLP to create a bespoke Environmental Management System.

PPN 006: Your Fast Track to Sustainable, Compliant Procurement

Public sector buyers are raising the bar, and PPN 006 is the test every supplier must pass. As government departments tighten their sustainability expectations, the firms that can demonstrate credible carbon reporting and a robust Carbon Reduction Plan will secure a clear competitive edge in panel reviews and tendered work. Those who get ahead now will dominate tenders for years to come. Those who don’t? They’ll watch the contracts go elsewhere. We break down what PPN 006 really demands—and how smart London law firms are turning compliance into a powerful competitive advantage.