What is the difference between ESOS and SECR?

The main difference between ESOS and SECR is that ESOS requires qualifying organisations to assess their energy use and identify energy-saving opportunities, while SECR requires organisations in scope to report their energy use and greenhouse gas emissions each year.

ESOS operates on a four-year compliance cycle. Qualifying organisations must calculate their total energy consumption, identify the areas that account for at least 95% of it and cover this significant energy consumption through ESOS energy audits, ISO 50001 or a combination of the available compliance routes. ESOS also requires energy intensity ratios and identifies practical opportunities to reduce energy use and costs.

SECR, or Streamlined Energy and Carbon Reporting, is an annual reporting requirement. Organisations in scope report energy consumption, greenhouse gas emissions, at least one intensity ratio and information about energy-efficiency measures taken during the financial year. The information is included in the organisation’s annual report or accounts.

The qualification rules are different. SECR applies to quoted companies and to qualifying large unquoted companies and LLPs. Large unquoted companies and LLPs generally qualify where they meet at least two of the relevant employee, turnover and balance-sheet tests. Organisations consuming 40,000 kWh or less during the reporting period may qualify for reduced SECR disclosure requirements.

The reporting boundaries can also differ. Quoted companies report global energy use and greenhouse gas emissions under SECR, while large unquoted companies and LLPs generally report UK energy use and associated emissions. ESOS applies its own rules for determining the energy consumption that falls within the assessment.

An organisation may need to comply with ESOS, SECR or both. Energy data collected for SECR can often support an ESOS assessment where the scope and underlying data are suitable. However, completing an SECR disclosure does not count as ESOS compliance. ESOS compliance is reported separately through MESOS.