If your organisation qualifies for ESOS, there’s a good chance it also has to report under Streamlined Energy and Carbon Reporting (SECR): the two schemes catch a very similar population of large UK organisations. What often happens in practice is two disconnected exercises: one team, or one consultant, pulling energy data together for the ESOS audit, and a separate team pulling largely the same data together, months later, for the annual SECR disclosure. Same meters, same invoices, same consumption figures, collected twice, validated twice, and usually paid for twice.
It doesn’t need to work that way. But before you can combine them properly, it’s worth understanding exactly where the two schemes overlap, and where they don’t, because the qualification criteria aren’t identical, and that catches people out.
First: these are two different tests, not one
This is the detail most guidance skips past. ESOS Phase 4 and SECR use different qualifying thresholds, so an organisation can fall into one scheme without automatically falling into the other.
ESOS Phase 4 applies if your organisation is a UK undertaking, or part of a UK group, with 250 or more employees, or an annual turnover above £44 million and an annual balance sheet total above £38 million.
SECR applies to large unquoted companies and LLPs that exceed at least two of the following three thresholds: turnover above £36 million, balance sheet total above £18 million, or an average of more than 250 employees across the financial year. (Quoted companies have to report under SECR regardless of size.)
In practice, most organisations large enough to qualify for ESOS also clear the SECR thresholds, but the balance sheet figure in particular is set much lower for SECR (£18m vs £38m), so it’s worth checking both independently rather than assuming one qualification confirms the other. If you’re not sure where your organisation stands on either, that’s the first thing to establish before building a combined data process.
There’s a wrinkle worth knowing here too. In April 2025, the UK raised the general Companies Act thresholds that define a “large” company for accounts purposes: turnover and balance sheet limits both went up by roughly 50%. SECR didn’t move with them. Its qualifying thresholds are set separately, in their own regulations, and have stayed at £36 million turnover and £18 million balance sheet since 2019. The result is a “stranded band”: an organisation with, say, £45 million turnover and a £22 million balance sheet is now sized as medium for its annual accounts, but still squarely a large company for SECR purposes, and still has to report. If your finance team has recently reclassified your accounts as medium-sized, it’s worth checking that hasn’t quietly been read across into your SECR obligations too. It hasn’t.
What each scheme actually requires
ESOS Phase 4 requires: a full measurement of UK energy consumption; identification of significant energy users; ESOS energy audits across qualifying assets; independent review by an approved ESOS Lead Assessor; formal board-level sign-off; and notification to the regulator. It runs on a four-year cycle. The current qualification date is 31 December 2026, with compliance due by 5 December 2027.
SECR requires six things disclosed annually, through your company’s directors’ report: UK Scope 1 emissions (direct emissions from gas combustion and transport fuel, in tCO2e); UK Scope 2 emissions (from purchased electricity); total UK energy use as one aggregate kWh figure covering electricity, gas and transport fuel; at least one intensity ratio (emissions against a business metric you choose, such as turnover, floor area or headcount); a methodology statement identifying the calculation standard, conversion factors and any estimation used; and a narrative on energy efficiency actions taken during the year (or an explicit statement that none were taken).
Where the overlap actually sits
Line up the two requirement lists and the shared foundation is clear: both need accurate, site-level energy consumption data (electricity, gas, transport fuel), broken down in enough detail to be defensible under scrutiny. That’s the expensive, time-consuming part of either exercise: chasing invoices and meter reads across every site, reconciling gaps, and validating the numbers. Once that dataset exists and is properly validated, it can serve both:
| Data collected once | Feeds ESOS Phase 4 | Feeds SECR |
|---|---|---|
| Site-level electricity consumption (kWh) | Significant energy user identification, audit scope | Scope 2 emissions, total energy use figure |
| Site-level gas consumption (kWh) | Significant energy user identification, audit scope | Scope 1 emissions, total energy use figure |
| Transport fuel data | Included where in scope for the audit | Scope 1 emissions, total energy use figure |
| Meter inventory and validation | Evidence base for the audit report | Underpins confidence in the aggregate energy figure |
| A chosen business activity metric (turnover, floor area, headcount) | Not required | Intensity ratio denominator |
| Energy efficiency measures taken | Feeds ESOS recommendations and Phase 4’s requirement to account for prior actions | SECR’s efficiency narrative disclosure |
What doesn’t overlap: SECR’s intensity ratio and efficiency narrative are specific disclosure requirements with no ESOS equivalent, and ESOS’s independent Lead Assessor review and formal audit methodology go well beyond what SECR asks for. So this isn’t a case of “do one audit and get both for free.” It’s a case of not re-collecting the same raw data twice for two different downstream reports.
A worked example
Take a multi-site organisation running, say, 15 UK properties. Handled separately, that’s 15 sites’ worth of electricity and gas invoices gathered and validated for the ESOS audit in one project, then the same 15 sites’ worth gathered and validated again, often by a different person, sometimes a different department, for the SECR disclosure a few months later. Any site where a meter changed, a reading was estimated, or a tenancy shifted has to be resolved twice, independently, with two chances for the two versions to disagree.
Handled as one dataset: the data is gathered and validated once, to the more rigorous ESOS Phase 4 standard, and the SECR disclosure draws from the same validated figures, adding only the intensity ratio calculation and efficiency narrative on top. The site-level reconciliation work, which is where most of the time and cost sits, happens once instead of twice.
How to build one audit-ready dataset
- Assign one internal owner for energy data, not one per compliance scheme. If ESOS and SECR are being coordinated by different people, or different departments, who aren’t talking to each other, duplication is close to guaranteed, and so is the risk of the two reports quietly disagreeing with each other.
- Align your data collection calendar. ESOS Phase 4’s 12-month data-gathering period doesn’t have to run separately from your SECR reporting year: deliberately overlapping the two means one collection cycle serves both, rather than running two 12-month windows that never quite line up.
- Validate once, to the higher standard. ESOS Phase 4 requires a more rigorous evidence base than SECR alone demands. Validating your data to that standard once means it’s already solid enough to support the SECR disclosure, rather than needing a second, lighter validation pass later.
- Keep the underlying evidence in one place. When the same team, or the same auditor, can point to a single validated dataset for both disclosures, board sign-off gets faster, external scrutiny gets easier to satisfy, and the numbers stay consistent year to year rather than drifting apart.
- Decide your intensity ratio metric early, and choose it with SECR reporting in mind rather than as an afterthought once the ESOS audit is already finished. Floor area, turnover and headcount all tell a different story, and it’s easier to pick the right one before your report format is locked in than to change it later.
ESOS Phase 4 has a fixed compliance deadline.
Lead Assessor capacity gets tighter as the deadline approaches, so businesses that leave their audit late often find themselves short of options. Starting the conversation early gives you time to do this properly, not under pressure.
Ash Williams, our Sustainable Business Solutions Manager, can walk you through what Phase 4 means for your portfolio.
Frequently asked questions
Does qualifying for ESOS mean we automatically have to report under SECR?
No. The thresholds are different: SECR’s balance sheet threshold (£18m) is set considerably lower than ESOS Phase 4’s (£38m). Check both independently.
Can the same consultant or team handle both?
Yes, and there’s a strong case for it: the overlapping data work is exactly where combining the two saves the most time and cost.
Does SECR require an independent audit like ESOS does?
No. SECR is a disclosure requirement through your directors’ report; it doesn’t require an approved Lead Assessor or independent audit the way ESOS does. The rigour of an ESOS-standard audit simply gives you a stronger evidence base to disclose against.
What happens if our ESOS and SECR figures don’t match?
It happens more often than organisations expect when the two are run separately, and it’s exactly the kind of inconsistency that draws scrutiny from a board or an auditor. Running both from one validated dataset is the most reliable way to avoid it.
How Carbonxgen approaches this
We manage ESOS and SECR as a single validated dataset wherever a client qualifies for both, rather than as two disconnected projects: one round of data gathering, one validation process, and reporting that stays consistent across both disclosures.
If you’re preparing for ESOS Phase 4 and want to make sure your SECR reporting isn’t being duplicated unnecessarily, find out more about our ESOS Phase 4 Compliance service, or see how we approach SECR compliance, or get in touch to talk through running the two together.