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Does ESOS Apply to Charities?

ESOS is a scheme that intends to reduce the UK’s overall impact on the environment by holding businesses accountable for their energy use and associated carbon emissions. This is a mandatory activity for all businesses that meet the requirements, and everyone that qualifies should do their part to implement the recommendations provided. In this blog, we discuss whether charities qualify for ESOS and the steps required to comply.

So does ESOS apply to charities? Charities are only required to comply with ESOS if they gain income from selling products or services or if they meet the following criteria: 250 or more employees, an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million.

Read on to find out more about whether charities need to comply with ESOS.

Do Charities Meet the Requirements for ESOS?

ESOS is an essential step in reducing energy waste, improving energy consumption efficiency and minimising emissions of carbon across the UK. It is a mandatory requirement and is intended to increase the awareness of how much energy businesses consume and waste during their daily activities. However, only businesses that meet the following criteria are required to complete the assessment:

They have 250 or more employees

They have an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million

Businesses that are part of a group of businesses will still need to complete an ESOS assessment each 4 years when they meet this criteria. The responsibility lies with the highest UK parent business in this situation. 

Charity organisations are included within the scope of ESOS and are specifically outlined as not automatically exempt from ESOS compliance. If your charity carries out activities considered as trade or business activities such as producing goods or services for income, your charity will qualify for mandatory ESOS compliance. If your charity does not carry out those activities, it must meet the aforementioned criteria to require ESOS compliance. 

What Should I Do If My Charity Meets ESOS Requirements?

Where charities meet the requirements, you must be proactive about your submission; there are penalties for missing deadlines or submitting incorrect data. These fines increase over time, making this a costly mistake that can also be detrimental to your charities’ reputation. 

The qualification date for ESOS Phase 3 is 31 December 2022 and the submission deadline is on 05 December 2023. There is nothing wrong with being prepared and starting early as this can help keep costs for your charity low by identifying actions to reduce consumption sooner. 

The ESOS assessment process starts with an audit of 12 months of your charities’ energy data, along with an energy consumption profile of your site. This should provide an accurate representation of how, why and where your charity consumes energy. Some charities will of course have higher and/or more consumption levels depending on their size and scale. 

Once the assessment is complete, you will receive a detailed report with recommendations on areas for improvement, specific to your business. Following these recommendations is not mandatory, however it is strongly recommended that you work on these improvements to reduce the negative impact on the environment and reduce your costs.

For more information about ESOS compliance, check out our dedicated page and find out how Boxfish’s experts can help your charity. 

Does SECR Apply to Charities?

SECR is another scheme created to minimise impact on the environment and reduce business’ energy bills. This scheme focuses on measuring carbon emissions and energy consumption. Similar to ESOS, charities are required to complete SECR if they meet 2 out of 3 of the following criteria:

They have at least 250 employees

They have an annual turnover greater than £36 million 

They have an annual balance sheet total greater than £18 million

There is no set deadline for SECR compliance, however qualifying charities are required to submit a compliant SECR report along with their annual accounts. This provides a loose ‘deadline’ that is linked to the financial year, with 9 months leeway to submit following the year closing out. 

What Should I Do If My Charity Meets SECR Requirements?

For your charity to be compliant with SECR, you need to measure and quantify your Scope 1, Scope 2 carbon emissions. Most Scope 3 carbon emissions are voluntary, however capturing mileage driven in staff’s personal vehicles which they would like to claim back, is a requirement – best practice is to capture more Scope 3 emissions if the data is readily available (at some point, capturing most of your Scope 3 will become mandatory so now is the time to start developing your systems and process to assist this in the future). This data can then be used to calculate an intensity metric. Although not a mandatory step, best practice also suggests that you should include any details of actions taken or which will be taken  to reduce the intensity metric over time. 

For more information about SECR compliance, check out our dedicated page and find out how Boxfish’s experts can help your charity. 

ESOS and SECR Compliance at Boxfish

Our free, no obligation review of your charity will allow us to advise the best course of action to save you money on ESOS and SECR. As the input data is similar for both ESOS and SECR, if you do have to comply with both, Boxfish have developed significant cost efficiencies that can be unlocked if we contract for both at the same time.

Contact us today to start swimming against the tide.

 

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