With the next Energy Savings Opportunity Scheme (ESOS) compliance deadline approaching in December 2027, organisations that qualify for ESOS should already be considering how they will demonstrate compliance.
For some organisations, implementing an ISO 50001 Energy Management System could provide a better alternative to periodic ESOS energy audits. However, there has been some confusion about exactly what ISO 50001 does and does not exempt an organisation from doing.
ISO 50001 can substantially change the way an organisation approaches ESOS compliance and also deliver something considerably more valuable than just regulatory compliance.
But beware: ISO 50001 is not a blanket exemption from ESOS.
What is ESOS?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme applying to qualifying large organisations and corporate groups in the UK.
ESOS requires participating organisations to measure their energy consumption, identify opportunities for improving energy efficiency and follow an appropriate route to compliance.
The current ESOS Phase 4 compliance deadline is 5 December 2027.
The Environment Agency has also confirmed that the scheme is evolving. Following changes introduced for Phase 3, participants are now expected to produce an ESOS report, action plan and annual progress updates. Further Phase 4 guidance and changes to the “Manage your ESOS” reporting system are expected ahead of the 2027 deadline.
For organisations preparing for Phase 4, this makes energy management an ongoing task.
Can ISO 50001 be used for ESOS compliance?
Yes. ISO 50001 is recognised as an alternative to an energy audit under ESOS, but you must still make an ESOS submission/notification to the MESOS system.
ISO 50001:2018 is the international standard for Energy Management Systems, usually abbreviated to EnMS. It provides organisations with a structured framework for understanding their energy use, establishing energy objectives, monitoring energy performance and continually improving energy efficiency.
Rather than conducting a separate energy assessment periodically, ISO 50001 embeds energy management into the organisation’s management system.
This makes ISO 50001 particularly interesting for organisations that expect to remain within the scope of ESOS over successive compliance periods.
Does ISO 50001 mean you don’t need an ESOS Lead Assessor?
Potentially, but there is an important qualification.
Current Environment Agency guidance states that an organisation does not need to appoint an ESOS Lead Assessor where its ISO 50001 certification covers 100% of its total energy consumption.
This is important because if an ISO 50001 certificate covers less than the organisation’s total energy consumption, it does not automatically remove the Lead Assessor requirement. The Environment Agency specifically states that this remains the case even where the ISO 50001 certification covers or exceeds the organisation’s identified areas of significant energy consumption.
In other words, organisations should not assume that simply having an ISO 50001 certificate removes the requirement for a Lead Assessor.
The scope of the certified Energy Management System matters.
For organisations considering ISO 50001 partly because of ESOS, the intended certification scope should therefore be considered carefully during implementation.
Does ISO 50001 mean you don’t need an ESOS report?
No and this is an important misconception.
Current Environment Agency guidance requires ESOS participants to complete an ESOS report detailing their assessment, whether they have used an energy audit or an alternative compliance route such as ISO 50001, unless they have zero energy supplies.
Using ISO 50001 can therefore change the route through which you demonstrate compliance, but it does not currently remove the ESOS reporting obligation altogether.
The report must contain information about matters including energy consumption, the compliance routes used, energy-saving opportunities and potential energy savings.
Organisations using ISO 50001 should therefore think of the standard as a way of integrating ESOS requirements with a broader Energy Management System rather than as a way of simply opting out of ESOS.
ISO 50001 versus an ESOS Energy Audit
For some organisations, continuing with periodic ESOS energy audits will remain the most appropriate and proportionate approach.
For others, ISO 50001 could offer considerably greater long-term value.
An ESOS audit is primarily concerned with assessing energy consumption and identifying energy-saving opportunities within the regulatory framework. ISO 50001 goes further by establishing an ongoing management system for energy performance.
The organisation establishes an energy policy, analyses energy use, determines relevant energy performance indicators and baselines, establishes objectives and targets, introduces operational controls and continually evaluates whether energy performance is improving.
This makes energy efficiency an ongoing management process.
A business with relatively straightforward energy consumption may conclude that an ESOS energy audit remains the most efficient compliance route. A manufacturing, engineering, logistics, property or other energy-intensive organisation may find that the ongoing financial and operational benefits of ISO 50001 make certification considerably more attractive.
Can ISO 50001 actually reduce energy costs?
That is ultimately what an Energy Management System should be designed to achieve.
ISO 50001 requires organisations to understand how and where energy is being consumed and to use data to make informed decisions about energy performance.
This can reveal opportunities that are easily overlooked when energy is treated simply as an overhead.
Depending upon the organisation, improvements might involve building controls, heating and cooling, compressed air, motors, machinery, lighting, transport, production processes, operating schedules, procurement decisions or employee behaviours.
More importantly, ISO 50001 provides the management framework needed to determine whether those changes actually work.
Energy Performance Indicators and Energy Baselines allow organisations to monitor performance over time rather than relying solely upon headline energy bills, which can be distorted by changes in production, weather, occupancy or energy prices.
ISO describes improved energy efficiency, reduced energy costs, better performance monitoring and reduced environmental impact among the benefits that can result from implementing ISO 50001.
ISO 50001 can integrate with your existing ISO Management System
For organisations already certified to standards such as ISO 9001 for Quality Management, ISO 14001 for Environmental Management or ISO 45001 for Occupational Health and Safety, implementing ISO 50001 does not necessarily mean creating an entirely separate management system.
ISO 50001 follows the management system approach used by other ISO standards and is designed to facilitate integration.
Existing processes for document control, internal audits, management review, objectives, competence, corrective action and continual improvement can potentially be extended to incorporate energy management.
Organisations already operating an Integrated Management System may therefore have much of the underlying management infrastructure required for ISO 50001 already in place.
The specialist work is then concentrated on the energy elements of the system, including understanding energy consumption, identifying significant energy uses, establishing energy baselines and Energy Performance Indicators and demonstrating improvement in energy performance.
ISO 50001 Consultancy and ESOS Energy Audit Support
Assent Risk Management can help organisations determine the most appropriate route to managing their energy and ESOS obligations.
Our consultants can support organisations with ISO 50001 implementation, Energy Management Systems, energy audits, gap analysis, internal audits and preparation for independent ISO certification.
Where an organisation already operates ISO 9001, ISO 14001, ISO 45001 or another management system, we can also explore opportunities to integrate ISO 50001 into the existing framework rather than unnecessarily duplicating processes.
For organisations considering their options ahead of ESOS Phase 4, we can review your existing management systems, energy profile and compliance requirements and help determine whether an ESOS energy audit, ISO 50001 certification or a combination of compliance routes is the most appropriate approach.
Need help preparing for ESOS Phase 4 or implementing ISO 50001? Contact Assent Risk Management to discuss your organisation’s energy management requirements.
