The Regulatory Push Towards Net Zero
As the United Kingdom accelerates its legally binding commitment to reach Net Zero emissions by 2050, environmental compliance has become a strategic and legal obligation for organisations of all sizes. Increasing scrutiny from government bodies, investors, supply-chain partners and consumers means that transparency on carbon emissions and energy usage is no longer optional. Instead, it is central to corporate governance and long-term competitiveness.
To support this transition, the UK Government has introduced three core frameworks: the Energy Savings Opportunity Scheme (ESOS), Streamlined Energy and Carbon Reporting (SECR), and Carbon Reduction Plans under Procurement Policy Note 06/21 (PPN 06/21). Each plays a distinct but interconnected role. ESOS requires organisations to understand and assess their energy consumption. SECR ensures annual reporting and ongoing transparency. PPN 06/21 extends this into public procurement, requiring suppliers bidding for major government contracts to publish credible, detailed Carbon Reduction Plans.
Individually, these frameworks help organisations gather accurate data and implement practical improvements. Collectively, they set the foundation for measurable emissions reduction. Businesses that act now not only avoid compliance risks but also strengthen their reputation, reduce operational costs, and enhance their eligibility for government and corporate contracts.
At Focus Green, we help organisations transform compliance from a regulatory requirement into a strategic asset. Through comprehensive auditing, robust data collection and joined-up carbon management, we support businesses in meeting their obligations while unlocking meaningful financial and environmental benefits.
Understanding ESOS: The Energy Savings Opportunity Scheme
ESOS is a cornerstone of the UK’s decarbonisation strategy. Established under the Energy Savings Opportunity Scheme Regulations 2014 and administered by the Environment Agency, it requires large UK organisations to measure their energy use, identify energy waste, and highlight opportunities for cost-effective energy reduction.
What ESOS Is
ESOS is a mandatory energy assessment programme that operates in four-year phases. Its purpose is to ensure that large undertakings understand their total energy consumption and identify opportunities for efficiency. Each phase requires organisations to measure their energy use across buildings, industrial processes and transport, analyse areas of significant consumption that represent at least 95% of their total usage, and produce an ESOS audit reviewed by a qualified Lead Assessor. They must also notify the Environment Agency of their compliance and, from Phase 3 onwards, develop an ESOS Action Plan with annual progress reporting.
Although organisations are not legally required to implement the improvement opportunities identified through ESOS, many discover substantial savings from straightforward actions such as upgrading to LED lighting, improving heating controls or reviewing transport efficiency. These actions often lead to immediate operational benefits and long-term cost reductions.
Who Must Comply with ESOS
ESOS applies to any UK undertaking that meets one of the following thresholds on the qualification date: employing at least 250 people, or having an annual turnover exceeding £44 million and a balance-sheet total above £38 million. It also applies to UK branches of overseas companies that meet these thresholds. Because group structures can significantly influence eligibility, organisations must carefully review their corporate group at the start of each phase to determine whether subsidiaries fall within scope.
Key ESOS Requirements
To comply with ESOS, organisations must collect at least a full year of energy data, including the qualification date. They need to identify areas of significant energy consumption that account for 95% or more of their total usage and ensure these areas are subject to an ESOS-compliant audit. A qualified ESOS Lead Assessor must review and approve the report, and the organisation must notify the Environment Agency through its online portal.
For Phase 3, qualifying organisations must also create an ESOS Action Plan, outlining how they intend to act on audit findings, and submit two annual progress updates (currently due in December 2025 and December 2026). Similar progress-reporting requirements are expected to continue into Phase 4.
Why ESOS Matters
ESOS equips organisations with a detailed understanding of how they use energy and where inefficiencies exist. It provides a clear, evidence-based foundation for reducing energy waste and improving operational performance. ESOS data feeds naturally into SECR reporting, Carbon Reduction Plans and long-term Net Zero strategies. Organisations that take ESOS seriously often benefit from reduced operating costs, more precise sustainability metrics and a stronger position in competitive tenders.
At Focus Green, our Lead Assessors guide companies through the entire ESOS journey, ensuring data quality, regulatory compliance and practical, actionable insights that translate into real savings.
SECR: Streamlined Energy and Carbon Reporting
The Streamlined Energy and Carbon Reporting (SECR) framework is another essential component of a company’s legal duties under ESOS, SECR, and carbon reduction reporting. Introduced by the UK Government in April 2019, SECR was designed to simplify energy and emissions reporting for businesses while promoting transparency and accountability.
Unlike ESOS — which focuses on periodic energy audits — SECR requires organisations to report energy use and associated carbon emissions every year within their company filings. This approach ensures that environmental performance becomes part of a business’s ongoing governance, not just a four-year compliance exercise. By disclosing their emissions publicly, businesses demonstrate to regulators, investors, and customers that they are taking measurable steps toward energy efficiency and sustainability.
What SECR Is
SECR replaces the CRC Energy Efficiency Scheme and simplifies corporate energy reporting. It aims to increase transparency around greenhouse gas emissions, encourage senior management to consider energy usage in their decision-making, and support organisations in reducing inefficiency. Unlike ESOS, which occurs every four years, SECR requires an annual update, ensuring emissions reporting remains current and consistent.
Who Must Comply with SECR
SECR applies to quoted companies listed on UK or overseas stock exchanges, as well as large unquoted companies and LLPs that meet at least two of the following criteria: 250 or more employees, turnover exceeding £36 million and a balance-sheet total above £18 million. However, since financial thresholds increased for accounting periods beginning on or after April 2025, organisations must verify whether they remain in scope under the new definitions. Companies consuming 40,000 kWh or less annually must still state that they are a low-energy user.
Separately, UK company-size thresholds under the Companies Act have increased for accounting periods beginning on or after 6 April 2025. However, the SECR regulations currently still use the original thresholds above, so organisations close to the boundary should take advice on how both sets of rules apply to them.
What SECR Requires
A compliant SECR report must include an organisation’s total UK energy consumption from electricity, gas and transport, along with associated greenhouse gas emissions expressed in tonnes of CO₂e. At least one intensity ratio, such as emissions per employee or per £ of turnover, must be disclosed to demonstrate the organisation’s relative efficiency. The report must also describe actions taken during the reporting year to improve energy performance and, where available, provide comparative data from previous reporting periods. All calculations must use verified government conversion factors.
Why SECR Matters
SECR strengthens corporate governance by requiring organisations to disclose their energy performance publicly. This transparency can improve trust among investors, customers and regulators. SECR also drives ongoing cost savings by highlighting inefficiencies and reinforcing the need for oversight of energy management. Preparing for SECR helps organisations meet evolving reporting standards, including the forthcoming UK Sustainability Reporting Standards (UK SRS), which are expected to underpin mandatory climate-related disclosures from 2026 onwards. Failure to comply may result in penalties from Companies House and potential scrutiny from regulatory bodies, including the Financial Reporting Council.
Integrating SECR into Business Strategy
Organisations that integrate SECR into their wider sustainability strategy gain the most value. ESOS audit data should be used to inform SECR disclosures, ensuring alignment and avoiding duplication of effort. Reliable data-collection systems enhance accuracy, while senior leadership engagement ensures sustainability actions are embedded in daily operations. Sharing SECR progress internally and externally enhances transparency and demonstrates credibility.
Focus Green helps businesses create efficient SECR processes, providing accurate emissions calculations, clear intensity ratios and Directors’ Report-ready disclosures that meet regulatory expectations and support long-term carbon management.
PPN 06/21: Carbon Reduction Plans for Government Contracts
While ESOS and SECR focus on energy efficiency and transparent emissions reporting, the UK Government has gone a step further by embedding sustainability directly into its procurement process. Under Procurement Policy Note 06/21 (PPN 06/21), any supplier bidding for significant government contracts must demonstrate a transparent and credible commitment to reaching Net Zero by 2050.
This requirement has transformed sustainability from a voluntary corporate initiative into a commercial necessity. Businesses that cannot provide a compliant Carbon Reduction Plan (CRP) risk losing access to lucrative public-sector opportunities.
What PPN 06/21 Is
Introduced by the Cabinet Office in 2021, PPN 06/21 requires public-sector buyers to consider suppliers’ sustainability performance as part of the selection criteria. Suppliers must demonstrate that they have calculated their emissions, planned reduction measures, and aligned themselves with the UK’s Net Zero 2050 goal. A CRP is not optional: organisations that fail to provide one are automatically excluded from the tender process.
Who PPN 06/21 Applies To
The policy applies to any organisation bidding for central government contracts valued at more than £5 million per year. It also covers framework providers and consortium partners whose involvement exceeds the threshold. Even organisations not currently bidding for such contracts are increasingly adopting CRPs proactively to demonstrate environmental leadership and prepare for future procurement opportunities.
What a Carbon Reduction Plan Must Include
A compliant CRP must publicly commit the organisation to achieving Net Zero by 2050, with senior-level sign-off. It must present baseline and current emissions for Scope 1, Scope 2, and relevant Scope 3 categories, and describe the emissions-reduction initiatives already in place, along with planned future actions. The CRP must be reviewed annually, updated to reflect progress and published on the organisation’s website.
Why PPN 06/21 Matters
PPN 06/21 encourages alignment between public procurement and the UK’s Net Zero strategy. Organisations with clear, credible Carbon Reduction Plans are more competitive in tenders and better positioned to build trust with public bodies. CRPs also support strategic planning by integrating ESOS and SECR data into a coherent set of carbon metrics, helping organisations track progress over time and maintain transparency.
How Focus Green Supports Carbon Reduction Plans
Focus Green develops CRPs that meet all Cabinet Office requirements. We calculate verified Scope 1, 2 and 3 emissions, build clear baselines and produce tailored reduction strategies aligned with each organisation’s operational needs. We support annual updates, ensure director-level approval, and help integrate CRP reporting with ESOS and SECR frameworks for maximum consistency and credibility.
How These Frameworks Interconnect
The UK’s environmental legislation can seem fragmented at first glance — with separate reporting obligations under ESOS, SECR, and PPN 06/21. However, these frameworks are designed to work in harmony, guiding organisations along a clear path from energy assessment to emissions reduction and public accountability. Together, they form the foundation of many organisations’ legal duties under ESOS, SECR, and carbon reduction reporting, ensuring that businesses not only measure their environmental impact but also act strategically on it.
ESOS: The Foundation — Measuring and Identifying Opportunities
ESOS provides the essential baseline for understanding energy usage. Its detailed audits identify inefficiencies across buildings, transport and industrial processes. This data serves as the basis for informed decision-making and directly feeds into SECR and CRP calculations.
SECR: Embedding Continuous Improvement
Once a business has established its baseline through ESOS, the Streamlined Energy and Carbon Reporting (SECR) framework ensures that progress doesn’t stop there. SECR makes energy and carbon reporting a routine, annual requirement, embedding sustainability performance within the company’s governance structure. It requires organisations to publish their energy use, carbon emissions, and efficiency actions as part of their financial reporting, ensuring accountability and year-on-year improvement.
Data gathered during ESOS audits feeds seamlessly into SECR disclosures, reducing duplication of effort and maintaining consistency across all environmental reports. This continuity transforms compliance from a periodic exercise into a culture of ongoing efficiency and transparency.
PPN 06/21: Turning Compliance into Competitive Advantage
Building upon the data and processes established through ESOS and SECR, Procurement Policy Note 06/21 (PPN 06/21) extends environmental accountability into the supply chain. To win or renew major government contracts, businesses must now produce a Carbon Reduction Plan (CRP) demonstrating their commitment to achieving Net Zero emissions by 2050. This requirement compels suppliers to set tangible targets, track progress, and publicly disclose their performance.
Organisations already compliant with ESOS and SECR are ideally positioned to meet the obligations under PPN 06/21. Their verified data, reporting structures, and reduction initiatives form the basis of a credible, compliant CRP — strengthening both environmental integrity and commercial competitiveness.
The Combined Impact: A Unified Compliance Framework
ESOS focuses on auditing energy use and identifying opportunities for improvement. This establishes a clear baseline and highlights where efficiency gains can be made.
SECR builds on this by requiring annual reporting and emissions tracking. This ensures greater transparency and encourages continuous year-on-year progress.
PPN 06/21 extends these efforts into public procurement by requiring suppliers to demonstrate credible Net Zero commitments. This strengthens an organisation’s competitiveness and showcases sustainability leadership.
Together, the three frameworks guide organisations from measurement to management and, finally, to market differentiation, enabling them to build confidence, resilience, and long-term sustainability capacity.
Building a Cohesive Strategy with Focus Green
Focus Green supports organisations in creating integrated sustainability frameworks by aligning ESOS, SECR and CRP requirements. We streamline data collection, ensure consistent metrics, and help prioritise energy-saving actions based on impact and feasibility. Our joined-up consultancy approach reduces administrative burden and turns regulatory requirements into coherent, actionable strategies.
Common Pitfalls Businesses Should Avoid
Despite clear government guidance, many organisations still encounter challenges when meeting their legal duties under ESOS, SECR, and carbon reduction reporting. The complexity of data collection, interpretation of regulations, and inconsistent internal communication often lead to avoidable errors — some of which can result in penalties or reputational harm.
Understanding these pitfalls in advance can help businesses take a proactive approach, ensuring full compliance while maximising the financial and strategic benefits of energy efficiency and carbon reporting.
Misjudging Eligibility and Scope
Businesses often underestimate the breadth of ESOS and SECR eligibility criteria. Complex group structures, overseas ownership or borderline thresholds can lead to unexpected obligations, so thorough eligibility assessments are essential.
Treating Compliance as a One-Off Exercise
Although ESOS occurs every four years, organisations should use its findings to inform continuous improvement. SECR requires annual reporting, and Carbon Reduction Plans must be updated each year. Treating compliance as ongoing rather than periodic improves accuracy and supports long-term planning.
Incomplete or Inaccurate Data Collection
Poor data practices — including inconsistent metering, fragmented spreadsheets and missing consumption figures — undermine compliance and reduce confidence in reporting. High-quality data collection systems are critical to meeting ESOS, SECR and CRP requirements.
Failing to Act on ESOS Audit Recommendations
ESOS identifies practical measures that can significantly reduce energy waste, yet many organisations fail to follow through. This oversight leads to higher operational costs and limited progress in future SECR and CRP updates. Ambiguity around responsibility between departments leads to delays, errors and inconsistent submissions. Clear roles and cross-departmental communication help ensure smooth reporting and compliance.
Overlooking Publication Requirements
Both SECR and CRPs require public transparency. Failure to publish annual updates, obtain director sign-off, or ensure website accessibility can result in non-compliance and, in the case of PPN 06/21, automatic exclusion from tenders.
Neglecting Alignment Between Frameworks
Consistency between ESOS, SECR and CRPs enhances credibility and simplifies reporting. ESOS data should directly inform SECR disclosures, and SECR emissions should be used to build CRP baselines. Disconnected reporting creates duplication and increases the risk of errors.
Ignoring Future Regulatory Updates
The UK’s sustainability landscape is evolving rapidly. New standards such as the UK Sustainability Reporting Standards (UK SRS) will soon formalise how businesses disclose climate-related information. Companies that fail to keep up with regulatory updates may find their existing reports insufficient for future compliance.
Why Avoiding These Pitfalls Matters
Addressing these pitfalls strengthens operational performance, reduces compliance risk and enhances reputation. Organisations that maintain accurate data, treat compliance as continuous and align reporting frameworks gain greater value from their sustainability efforts.
How Focus Green Supports Compliance and Sustainability
Meeting the UK’s legal duties under ESOS, SECR, and carbon reduction reporting can feel daunting — particularly for organisations juggling multiple sites, complex supply chains, and growing data demands. That’s where Focus Green provides essential clarity and structure.
As a leading energy and sustainability consultancy, Focus Green helps businesses translate regulatory requirements into actionable, measurable strategies. From initial audits to long-term Net Zero planning, our services ensure compliance, reduce energy costs, and enhance your organisation’s environmental credibility.
Expert ESOS Audits and Compliance Management
Our ESOS service covers eligibility assessments, data collection, complete audits and Lead Assessor oversight. We deliver clear reports that highlight practical opportunities for improving energy efficiency and support organisations in developing ESOS Action Plans and notifying compliance.
Integrated SECR Reporting and Carbon Accounting
We simplify SECR reporting by collecting accurate energy and emissions data, calculating verified CO₂e figures and preparing clear intensity ratios. Our team produces Directors’ Report-ready disclosures that align with government guidance and reflect annual efficiency improvements.
Carbon Reduction Plans (PPN 06/21) and Net Zero Strategy
For organisations bidding for government contracts, we prepare fully compliant Carbon Reduction Plans, including verified emissions calculations and detailed reduction strategies. We ensure annual updates are completed accurately and approved at the director level.
Continuous Compliance Monitoring and Advisory Support
We monitor regulatory updates, regularly review data quality, and provide ongoing guidance to ensure organisations remain compliant throughout the reporting cycle. This ensures consistency and reduces the administrative burden of managing multiple frameworks. By aligning ESOS, SECR and CRP requirements, Focus Green helps organisations improve operational efficiency, strengthen tender submissions, enhance ESG performance and demonstrate credible sustainability leadership.
Partner with Focus Green
Whether you’re preparing for the next ESOS Phase, refreshing your SECR report, or creating a compliant Carbon Reduction Plan, Focus Green provides the technical expertise and strategic insight to help you succeed.
Let’s simplify sustainability together — ensuring your organisation meets every compliance obligation while unlocking genuine commercial and environmental benefits.
Compliance Today, Competitive Edge Tomorrow
The UK’s journey to Net Zero by 2050 is reshaping how every organisation operates, invests, and reports. For businesses, compliance with ESOS, SECR, and Carbon Reduction Plans under PPN 06/21 is no longer an optional administrative task — it is a strategic necessity that directly influences credibility, competitiveness, and access to new opportunities.
Together, these frameworks form the foundation of modern environmental governance. They compel organisations to measure their impact, disclose their performance, and take tangible steps towards decarbonisation. In doing so, they are helping to build a stronger, more sustainable UK economy — one where energy efficiency and carbon accountability drive business growth.
From Obligation to Opportunity
Businesses that embrace environmental reporting as an opportunity rather than an administrative task gain significant advantages. They reduce operational costs, build trust with stakeholders, access new funding and procurement opportunities, and prepare for future regulatory standards such as UK SRS.
The Focus Green Advantage
At Focus Green, we help businesses turn compliance into a competitive advantage. Our consultancy brings together technical expertise, regulatory insight, and strategic foresight to ensure your organisation remains fully compliant, energy-efficient, and aligned with Net Zero goals.
From ESOS audits and SECR disclosures to Carbon Reduction Plans and ongoing monitoring, we deliver tailored solutions that simplify complexity and deliver measurable results. Whether you operate nationally or across multiple sites, we can integrate your compliance processes into a single, cohesive sustainability strategy.
Our goal is simple: to help your organisation meet every legal obligation while achieving genuine environmental and commercial gains.
Act Now — Lead the Change
With upcoming deadlines and increasing expectations, now is the time to strengthen your sustainability strategy. By acting early and working proactively, your organisation can remain compliant, competitive and ready for the evolving Net Zero landscape.
