This information was updated in June 2024 to reflect changes to the requirements
The deadline for Phase 3 of the Energy Savings Opportunity Scheme (ESOS) has already passed, but there is a grace period until 6 August 2024. If your organisation is not already in the process of gaining ISO 50001 certification, you will not have time to use it as an ESOS compliance route in this phase. But it is worth considering as a way of meeting your obligations in Phase 4 and beyond.
What is ISO 50001?
The International Organization for Standardization (ISO) is an official body that sets internationally recognised standards on everything from watch-making to yacht-building. ISO 50001 is the standard for energy management systems.
How ISO 50001 works
The point of having an energy management system (EnMS) is to help organisations do a better job of managing their energy consumption. This might include upgrading equipment or buildings, reducing waste or changing processes. The point of ISO 50001 is to give organisations a framework for these kinds of changes.
As with many ISO standards relating to management systems, the core process for following ISO 50001 is one of continual improvement called Plan – Do – Check – Act. Businesses are expected to keep their energy management policy under continual review, gathering data to assess its effectiveness and changing course if necessary.
ISO 50001 does not impose targets for energy consumption or efficiency. The idea is for the organisation to establish its own baseline and then improve from there.
Why choose ISO 50001 for ESOS compliance?
If your organisation has ISO 50001 certification covering all its reportable energy consumption, you have significantly less to do to meet your ESOS compliance than a comparable organisation without ISO 50001 certification.
You still need to complete an ESOS report, but it doesn’t have to include as much. You also are under no obligation to appoint a lead assessor.
We do not yet know if the de minimis exemption that we have in Phase 3 will exist in Phase 4. If it does, this will mean you can exclude up to 5% of your total energy consumption and call the rest your “significant energy consumption”. So ISO 50001 would only have to cover 95% of your total energy use to count as covering all reportable consumption.
Not the easy option
This might make ISO 50001 seem like a way of meeting your ESOS obligations with less work. But be warned: it is actually more challenging than carrying out an energy audit.
ESOS requirements (at the time of writing in June 2024) | ISO 50001 |
Phase 3 reporting in summer 2024, then no obligation to report again until the Phase 4 deadline (probably December 2027) | Annual or six-monthly external assessments |
Looking at the recommendations from your ESOS report and deciding which ones to follow | Implementing the best possible energy management system – which means implementing all recommendations |
Annual progress updates on how you are proceeding with your action plan | Continually reviewing your energy management system for possible improvements |
No business chooses ISO 50001 as the easy option. They choose it because it is globally recognised as energy management best practice. The obvious benefits include:
- Financial savings;
- Lower emissions;
- Proof that your organisation meets high standards for EnMS.
This proof might be used to comply with mandatory schemes such as ESOS, but it can also be shared with stakeholders, customers and the public.
Getting certification
ISO sets the standards, but it doesn’t perform certification, so you will need to find a certifying body. In the UK there are several bodies who can do this, including BSI (the British Standards Institution) and Lloyd’s Register. Look for one that is accredited by UKAS, the UK’s national accreditation body.
There are two stages to the audit for ISO 50001 certification. Stage 1 is a chance for the auditors to gather and review information on your energy management system. It is done on-site so that they can see the site conditions for themselves and talk to staff as well as looking through the documentation.
Stage 2 is the actual certification stage that determines whether or not your business is ISO 50001 compliant. It is more thorough than Stage 1 and could take many days/weeks and multiple site visits.
Timescales
It is too late to work towards ISO 50001 certification for Phase 3 compliance – but it isn’t too early for Phase 4.
It is likely that the Phase 4 guidelines will need your ISO 50001 accreditation to be valid on the Phase 4 compliance date, probably in December 2027.
- The good news? Even if you start now, your ISO 50001 certification will still be current by the end of Phase 4.
- The bad news? That’s because you’ll be continually working to keep it current. ISO 50001 is an ongoing process of improvement, so you will be having assessments at least once a year as well as carrying out internal progress checks.
You can get your Stage 1 and Stage 2 audit dates booked in at any time.
The more complex your business and the more sites it has, the longer the process will be.
If your business does not pass its Stage 2 audit, you will be told exactly which aspects of your EnMS are non-compliant and given a chance to fix them. But you will not get certified until the auditors are satisfied.
Giving your organisation the best chance of success
Many businesses treat the Stage 1 audit as a chance to learn of any potential issues and fix them before Stage 2.
Some businesses also book a “pre-audit” before Stage 1 so that they can spot any problems even earlier and address them with corrective measures.
For many organisations, implementing an energy management system in line with ISO 50001 requires resources that don’t exist in-house. So they outsource the job to an accredited Lead Auditor from an external organisation.
Proving ESOS compliance
The list of information you need to include is in section 10.1 of the official ESOS Phase 3 guidance:
- organisation name, number of companies in the participant group and corporate group structure chart or equivalent information setting out the relationship between organisations in the participant group
- details of the board level director responsible for sign-off and any personnel involved in completing the assessment and/or the report
- total energy consumption in kWh, and subtotals by organisational purpose
- energy intensity ratios for each relevant organisational purpose
- documented information maintained under section 7.5 of ISO 50001 which demonstrates that 100% of your total energy consumption is covered by the scope of your ISO 50001 energy management system during the compliance period
You will also need to submit information which you have documented under section 7.5 of ISO 50001. This information is all about proving that you are continually assessing the performance of your energy system and seeking to improve it – which you will be doing and documenting anyway to maintain your ISO 50001 certification. It is all listed in the same section of the official guidance.
Using ISO 50001 as a partial route to compliance
Some organisations use ISO 50001 to cover some, but not all, of their reportable energy use. If this is the case for your organisation, you will need to calculate exactly what percentage of your consumption is covered by ISO 50001. For the rest, you will need to carry out an ESOS audit and write a report in the normal way.
While achieving ISO 50001 certification is a challenge, it will result in your organisation following best practice in the way it manages energy. This is why many organisations choose this option, for the business benefits rather than for regulatory compliance reasons. But you should consider carefully before deciding that this is your best route to ESOS compliance.