An ESOS assessment can look complete while its supporting record still has gaps: a subsidiary missing from the group list, an unexplained meter allocation, or no written reason for the sites selected for audit. Phase 4 preparation is an opportunity to resolve these gaps before notification.
This guide focuses on the evidence pack for multi-entity businesses, not another general ESOS overview. The Environment Agency’s current Phase 4 guidance is the authority for qualification, assessment, notification and record keeping.
Anchor qualification to the correct date
The Phase 4 qualification date is 31 December 2026 and the deadline to notify compliance is 5 December 2027. These are different milestones: the first establishes qualification; the second is the notification deadline. Do not leave the group review until the notification date.
The guidance defines a large undertaking as one employing 250 or more people, or having both annual turnover above £44 million and an annual balance sheet total above £38 million. Apply the detailed guidance on employees, accounting periods and businesses growing or shrinking, rather than relying on one headline figure. Group rules can bring smaller entities into scope when a group contains a qualifying undertaking.
Create a group-boundary record
Start with an organisation chart showing the legal entities and ownership relationships relevant to qualification. Record which UK entities are included, which are excluded and why, with the supporting accounts and headcount evidence. Keep the legal boundary distinct from a facilities team’s list of occupied sites.
Identify the responsible undertaking and document any permitted arrangements for disaggregation or joint compliance. If acquisitions, disposals or reorganisations affect the picture, ask the Lead Assessor to apply the guidance to those events. A historical group chart alone is not enough. See our qualification-date guide.
Reconcile entities, sites and energy sources
Build a register linking each in-scope entity to its buildings, transport and industrial energy use. Assign an owner to each dataset. Record reporting periods, units, meter identifiers, estimates and the reasoning behind any allocations.
Check landlord-supplied energy, shared meters, leased premises and fleet records explicitly. Avoid counting the same energy twice or overlooking it because another company pays the bill. Apply the scheme’s energy-responsibility rules rather than assuming an EPC, a lease or a supplier account settles the question. Our landlord and tenant ESOS article explains why responsibility needs examining.
Keep decisions as well as spreadsheets
Retain the assessment approach, the reasoning for site sampling and the evidence behind any alternative compliance route. A reviewer needs to understand how the business moved from raw data to its reported energy use and identified opportunities.
Preserve audit outputs, assumptions, savings calculations, Lead Assessor review and required director sign-off. Record gaps and corrective actions as they arise. The evidence pack should explain the choices made, not just hold the final PDF. Consult the official guidance for the full record-retention requirements.
Separate the audit record from the delivery record
After notification, Phase 4 requires an action plan by 5 December 2028, followed by annual progress updates in 2029 and 2030 under the regulator’s guidance. Keep an owner for this work after the audit team has finished.
The audit record supports compliance and identifies opportunities. The delivery record tracks measures, approvals, implementation and the basis for claimed savings. Keep forecast savings separate from measured results, and document changes rather than silently replacing the original assumptions.
A practical readiness review
Before appointing or briefing an assessor, ask: Is the legal group boundary documented? Do all entities reconcile to the energy register? Are missing data and estimates visible? Is the sampling rationale recorded? Who approves the assessment, and who owns the action plan afterwards?
These checks make the assessment more efficient and the compliance record easier to defend. They do not replace the Lead Assessor’s judgment or the detailed ESOS rules. Discuss an ESOS evidence review or read about our ESOS Phase 4 service. General guidance only; confirm your circumstances against the current Environment Agency guidance.
Frequently asked questions
- Does every subsidiary need its own ESOS submission?
- Not necessarily. The group rules and any permitted disaggregation arrangements determine how compliance is organised. Document the boundary and responsible undertaking before deciding on submissions.
- Can a small company be included in ESOS?
- Yes. Group qualification rules can include smaller undertakings where the group contains a qualifying large undertaking. Assess the group, not just each company in isolation.
- Is a commercial EPC a substitute for ESOS evidence?
- No. An EPC is an asset rating for a building; ESOS considers organisational energy use and the applicable assessment and reporting requirements. The two records serve different purposes.
- What should we do if energy data is incomplete?
- Record the gap, source better evidence where possible and document any estimates and their justification under the guidance. Do not silently omit an entity or energy source.
Source: Environment Agency — How to comply with ESOS Phase 4