ESOS Phase 4: What UK Organisations Need to Know in 2026

The Energy Savings Opportunity Scheme, ESOS, is one of the UK's most significant mandatory energy compliance frameworks, and in 2026, its relevance to the music, media and entertainment sector has never been clearer.

With Phase 3 compliance now closed and Phase 4 underway, large organisations across the UK are under increasing pressure to demonstrate that their energy assessments are rigorous, their action plans credible, and their governance structures fit for purpose. And with the UK's Net Zero legislation setting the broader direction of travel, the stakes around energy efficiency have risen well beyond the regulatory minimum.

That’s why in this article, we cover:

• What ESOS is, and why it exists
• Why ESOS matters to music, media and entertainment
• Who qualifies for ESOS
• What ESOS requires organisations to do
• Where Phase 3 left things, and what Phase 4 will change
• How organisations should prepare

Let’s start from the beginning.

What Is ESOS?

ESOS is a mandatory energy assessment scheme for large UK organisations. Introduced in 2014 and administered by the Environment Agency, it requires qualifying organisations to carry out comprehensive energy audits every four years, covering all energy use: buildings, transport and industrial processes.

The scheme was designed to address a structural problem identified in the UK's 2012 Energy Efficiency Strategy: that large organisations were failing to act on energy efficiency, not because they lacked the will, but because they lacked the data to justify action. ESOS was the mechanism to change that.

The logic is straightforward. Organisations that understand where they consume energy are better positioned to reduce it. Across its history, ESOS has been estimated to have delivered £1.12 billion in energy bill savings for participating organisations. And with current energy costs, and the UK's legally binding commitment to Net Zero, that case for action has only strengthened.

ESOS is not a voluntary framework. It is a legal obligation: one with financial penalties for non-compliance, including fines of up to £50,000 for audit failures, plus £500 per working day, and the public naming of non-compliant organisations on GOV.UK.

Why ESOS Matters to Music, Media and Entertainment

ESOS is often discussed in the context of manufacturing or logistics. But large organisations in music, media and entertainment are not exempt: and the sector's energy profile makes compliance both challenging and commercially significant.

Major promoters, broadcasters, parent companies and global entertainment groups can qualify for ESOS on the basis of headcount or turnover. When they do, the energy consumed across their operations, venues, offices, studios, touring infrastructure and event production falls within scope.

That creates several pressure points specific to the sector.

Temporary power is one of the biggest blind spots. Live events run heavily on diesel generators: a source that our UK Events and Diesel Use report identifies as one of the most significant and underreported contributors to event-related emissions. Diesel use is both a direct energy cost and an escalating regulatory risk. Our UK Events and Diesel Use report identifies it as one of the most significant and underreported contributors to event-related emissions.

Transport is structurally significant. The MIT Climate Machine study: a collaboration involving Hope Solutions, Live Nation, Warner Music Group and Coldplay, drawing on data from more than 80,000 events, showed that travel accounts for 77% of live music emissions in the UK. Under ESOS, transport is a required area of assessment. For touring operations, that means freight, artist and crew travel, and, where applicable, audience transport infrastructure, all warrant scrutiny.

Governance is now explicitly required. ESOS demands board-level sign-off and director accountability. In a sector where sustainability has historically sat with communications or production teams, that represents a meaningful structural shift. Energy data must be owned, signed off and reported; not just estimated. This connects directly to the broader conversation around why greenwashing is no longer a communications issue but a governance one.

Sponsors and commercial partners are also paying closer attention. As major brands and broadcasters that sponsor events face their own ESOS and CSRD obligations, the quality of data flowing from events into their reporting increasingly matters. Understanding what ESG means in the context of live events and media is becoming a baseline expectation, not a differentiator.

Who Qualifies for ESOS?

ESOS applies to large UK undertakings and their corporate groups. For Phase 3, an organisation is qualified if, on 31 December 2022, it met the definition of a large undertaking: employing 250 or more people, or having an annual turnover exceeding £44 million and a balance sheet total exceeding £38 million.

For Phase 4, the qualification snapshot date is 31 December 2026, with the same thresholds applying. The government considered aligning them with the Streamlined Energy and Carbon Reporting (SECR) framework but decided against it.

Corporate groups qualify if at least one UK group member meets the criteria. UK-registered establishments of overseas companies are also required to participate if any part of their global corporate group's UK activities meet the qualifying criteria. Public sector organisations are generally exempt.

One important nuance here: if any single UK entity within a corporate group qualifies as a large undertaking, the entire group must participate. This catches many organisations that might assume their individual subsidiary is too small to qualify.

What Does ESOS Actually Require?

This is where most organisations either get it right or waste significant time and money getting it wrong.

ESOS is not a single audit. It is a structured compliance cycle, and since the 2023 Regulations raised the bar for Phase 3, the expectations around rigour, documentation and accountability have meaningfully increased. Here is what the process actually involves.

First, you measure everything

Total energy consumption across buildings, transport and industrial processes: all of it, accounted for in kWh. This is your baseline, and if it is inconsistent or poorly evidenced, everything that follows is built on sand.

Then, you identify where it matters most

At least 95% of that total consumption must be covered by either a formal energy audit or an approved alternative compliance route such as ISO 50001 certification. The 5% "de minimis" threshold tightened under Phase 3, down from 10%, so the days of quietly excluding inconvenient energy categories are largely over.

You also need to calculate energy intensity ratios for each operational category: buildings, transport, industrial processes and any other significant energy uses. These are not one-off figures. They exist to allow performance to be tracked, challenged and compared year on year. Done properly, they are one of the most useful outputs of the whole process.

The ESOS report is now mandatory for everyone

Under the 2023 Regulations, every qualifying participant must produce a formal written record of their assessment, covering the compliance route used, the energy saving opportunities identified, and progress made since the previous compliance period. This must be shared across the corporate group. It is no longer acceptable to complete an audit and file it away.

The action plan is where intent becomes accountability

Organisations must set out, formally and in writing, the energy saving measures they plan to implement. This plan must be signed off by a board-level director and submitted to the Environment Agency. From Phase 4 onwards, progress against those commitments must be evidenced in the assessment itself. 

Annual progress updates follow for two years

For Phase 3, these are due on 5 December 2025 and 5 December 2026. These are not optional check-ins; they are formal submissions, again requiring director sign-off.

That last point is worth pausing on. Director sign-off is not a rubber stamp. It places legal accountability for energy governance at the top of the organisation. In a sector where sustainability has often been delegated downwards, that is a structural shift, and one that regulators are increasingly prepared to enforce.

Where Things Stand After Phase 3

The Phase 3 compliance notification deadline passed on 5 June 2024. As of July 2025, the Environment Agency confirmed that over 80% of ESOS Phase 3 participants had met their compliance requirements, but that still leaves a significant proportion of qualifying organisations either late, incomplete, or at risk of enforcement action. Any organisation that qualified and has not yet submitted should contact the Environment Agency without delay.

Phase 3 introduced significant changes compared to earlier rounds, including the requirement for formal ESOS reports, action plans and annual progress updates. It also required public disclosure of high-level recommendations: a shift that moves ESOS closer to the transparency expectations of frameworks like CSRD. If you want to understand how these reporting standards are converging, our overview of ESG reporting basics is a helpful starting point.

What Phase 4 Will Change

Phase 4 is live. The compliance period runs from 6 December 2023 to 5 December 2027, and the organisations that treat that deadline as distant will be the ones scrambling for lead assessors in late 2027 and paying a premium for the privilege.

The changes coming into Phase 4 are not cosmetic. Two of the most-used shortcuts from previous phases, Display Energy Certificates and Green Deal Assessments, are being removed as compliance routes. If your Phase 3 approach leaned on either of these, you need a different strategy for Phase 4.

More significantly, the action plan is no longer a document you produce and move on from. Progress against commitments must now be evidenced within the ESOS assessment itself. Where commitments have not been met, a formal explanation is required. That is a material shift, from intention to accountability.

There is also a policy decision worth addressing directly. The previous government proposed expanding ESOS to cover Net Zero requirements alongside energy efficiency. That expansion has been postponed to Phase 5. Some organisations will read that as breathing room, but be warned: it’s not. The regulatory direction of travel is clear, and the commercial pressure from sponsors, broadcasters and investors is not waiting for Phase 5. Understanding what Net Zero actually requires in practice now, rather than when the regulations force the issue, is the difference between leading and catching up.

One further development worth noting: in February 2025, the British Standards Institution published PAS 51215-1:2025 and PAS 51215-2:2025; new standards covering energy and decarbonisation assessment processes and assessor competencies. These are voluntary for Phase 4, but they signal clearly where the methodology is heading.

How to Prepare

Preparation for Phase 4 starts now, not in 2027.

• Confirm whether you qualify: The qualification snapshot for Phase 4 is 31 December 2026. If you were in scope for Phase 3, assume continuity unless your structure has changed materially. If you have grown since 2022, through headcount growth or acquisition, you may be in scope for the first time.
  
  
• Review your Phase 3 action plan and progress: If you submitted an action plan, your first annual progress update was due on 5 December 2025. Use this process to identify gaps, strengthen your methodology and build institutional knowledge ahead of Phase 4.
  
  
• Invest in your data infrastructure: Consistent, traceable, repeatable energy data is the foundation of ESOS compliance. If your current approach relies on estimates and assumptions that cannot be clearly documented, that is the starting point for improvement.
  
  
• Map your energy across all operations: For organisations in live events and entertainment, this means looking beyond offices and studios to temporary infrastructure, touring logistics and supply chain energy use. The full picture matters, and the sector's emissions profile makes certain categories, particularly transport and temporary power, impossible to exclude.
  
  
• Establish clear governance: Who owns energy data within your organisation? Who will sign off the Phase 4 assessment? These questions should have clear answers well before the compliance deadline.
  
  
• Align ESOS with your broader sustainability strategy: ESOS compliance, done well, generates insights that are directly relevant to Net Zero planning, CSRD reporting and stakeholder engagement. For organisations asking whether the music, media and entertainment industry is on track for Net Zero, ESOS data is part of the answer. An integrated approach produces better outcomes, and makes the regulatory burden proportionally lighter.

From Compliance to Credibility

ESOS is a legal obligation. But for organisations in music, media and entertainment, it is also an opportunity to understand energy use, to demonstrate credible governance, and to build the kind of evidence base that increasingly defines commercial relationships with sponsors, broadcasters and partners.

At Hope Solutions, we support organisations across the sector to navigate exactly this: from energy assessment and action planning through to governance strengthening and sustainability strategy. If you are preparing for ESOS Phase 4, reviewing your Phase 3 position, or building a more integrated approach to energy and emissions, we are here to help.

Get in touch with the Hope Solutions team today.