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How Do ESOS and SECR Differ?

Posted in
Date
19/07/2021
how do esos and secr differ?

ESOS and SECR are two government schemes relating to energy consumption. Because of their broad similarity, it’s understandable that a lot of business owners and site managers are unsure how exactly they differ – and why each of them is important.

To make things easier, we’ll outline what ESOS and SECR mean, how they work and how they differ in simple terms…

What is ESOS?

First of all, ESOS stands for the Energy Saving Opportunities Scheme. Launched in 2014, it requires large undertakings to assess and report on their energy consumption at four-year intervals. That includes:

  • Appointing a lead assessor
  • Calculating energy consumption
  • Identifying areas of significant energy consumption
  • Notifying the Environment Agency
  • Keeping records of assessment

ESOS applies to all large undertakings with 250+ employees and/or an annual turnover in excess of £44 million (and a balance sheet total in excess of £38 million).

What about SECR?

On the other hand, SECR stands for the Streamlined Energy and Carbon Reporting framework. It was launched in 2019 to replace the Carbon Reduction Commitment – getting more businesses to report their energy use and resulting carbon emissions.

There are some slight differences in who SECR applies to, with all quote companies obliged to comply. That’s any company whose shares are traded on the stock exchange.

It also includes unquoted companies and Limited Liability Partnerships that have 250+ employees and/or an annual turnover in excess of £36 million (and a balance sheet in excess of £18 million).

How ESOS and SECR differ

As you can see, there are some slight differences in the eligibility criteria for ESOS and SECR. Namely, SECR includes all quotes companies and has a slightly lower threshold for annual turnover.

However, the most fundamental difference is that they measure different things. ESOS is primarily concerned with energy use, while SECR is focused on your organisation’s emissions.

Another difference is the frequency of the two, with SECR reported annually in the Directors’ Report for the financial year. In contrast, ESOS reports are required every four years with Phase 1 finishing in December 2015, Phase 2 in December 2019 and Phase 3 in December 2023.

Do I need to do both?

Even after highlighting the differences between ESOS and SECR, it’s clear that the two are quite similar and overlap in a few areas. Unfortunately, that doesn’t make you exempt from one by completing the other.

If you qualify for both ESOS and SECR, it’s important to meet the requirements of both schemes to avoid a hefty fine. As discussed in our post on non-compliance penalties, these could reach up to £40,000 for SECR and as much as £50,000 or £500 a day for ESOS.

Taking care of ESOS and SECR

As complex and time consuming as they may seem, ESOS and SECR are both essential steps for your business to stay compliant and avoid fines. But with the right approach, they could even save you money over time.

That’s where Volta Compliance comes in. Our dedicated ESOS services and SECR solutions can guide you through the assessment and reporting process for both schemes, minimising your company’s energy use in the process to keep you eco-friendly and cost-efficient.

Want to use ESOS and SECR as an opportunity, rather than a burden? Contact our team on 0113 397 1361 or email [email protected].

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Richard Carr Volta Compliance
Richard Carr
Managing Director
Richard is the Director of Volta Compliance. He is a fully qualified approved electrician graded with the JIB. Richard has over 20 years electrical experience working on commercial and industrial installations.