ESOS Compliance Period Three UPDATE – Mandatory energy audits for large enterprises

Our Head of Sustainability Ian Keenleyside would like to share his views on the forthcoming Energy Savings Opportunity Scheme (ESOS) regulations, as the Environment Agency (EA) announces they will increase their enforcement approach.

Whereas previously the EA would typically only issue a maximum penalty for one breach, for example a failure to notify was considered a failure to carry out an energy audit, therefore the maximum fine would only be for one failure, the new enforcement means each failure will be considered separately and the maximum penalty will be assigned per breach. As below;

1. Failure to notify: an initial penalty up to £5,000, plus a daily penalty of up to £500 for each working day the organisation remains in breach. This penalty will apply regardless of whether (or not) the organisation has undertaken an energy audit.
2. Failure to maintain records: an initial penalty of up to £5,000, plus a “sum representing the cost to the compliance body of confirming that the responsible undertaking has compliance complied with the scheme”. The organisation must also take steps to remedy the breach.
3. Failure to undertake an energy audit: an initial penalty of up to £50,000, plus a daily penalty of up to £500 for each working day the organisation remains in breach. The organisation must also take steps to remedy the breach. Note that there is a more lenient approach for new entrants, however: a lower initial penalty of up to £5,000.
4. Failure to comply with an enforcement/penalty notice: an initial penalty of up to £5,000; plus up to £500 for each working day the organisation remains in breach.
5. False or misleading statement: up to £50,000.

We are eagerly awaiting the outcome of the recent consultation on the proposed updates to the ESOS scheme, and very much in favour or incorporating net-zero carbon into the auditing requirements. Here at E.S.G Solutions as well as providing full ESOS lead assessor services we can also tailor our reports to incorporate wider ESG matters and broader environmental and wellbeing certification.