An update on ESOS Phase 2 compliance and the compliance audit In this article we provide an update on ESOS Phase 2 compliance and the compliance audit as extracted from the latest EA newsletter.

ESOS Phase 2 audit compliance update from the Environment Agency

Mar 9, 2020

Why do clients choose Smart GreenTech Solutions to achieve ESOS Phase 2 audit compliance and to keep them up to date with the latest news about ESOS Phase 2 and energy efficiency?

We love what we do and have a solid track record of ensuring that our clients achieve ESOS Phase 2 compliance with the least possible disruption, and to date all of our clients received a compliant with no issues identified outcome from their Environment Agency ESOS audit.

ESOS Phase 2 compliance deadline

The compliance date for Phase 2 is given in The ESOS Regulations 2014 as the 5th of December 2019, which is a fixed deadline.

There is no intention amongst the UK Regulators of ESOS to take a position, as was the case in Phase 1, where extra time was allowed for submissions before enforcement action was considered.

All qualifying organisations that did not complete an ESOS Assessment and submit a compliance notification using the Online Portal by the compliance deadline are currently at risk of enforcement action.

The period of time by which such organisations are late, and their efforts to comply, will be taken into consideration when determining any applicable enforcement action. A number of penalties have been issued for failures in Phase 1 compliance ranging up to £45,000 with a potential maximum of £90,000.

Compliance enforcement

The Regulators are currently issuing compliance notices to all corporate groups in the UK where they believe that they may be required to participate in ESOS Phase 2 but where they do not have a record of them having completed a notification.

The compliance notice requires the organisation to inform the Regulator that they are in the process of completing their ESOS obligations or provide evidence that they have already submitted a notification or do not qualify for ESOS.

ESOS Phase 2 compliance audits

The Environment Agency are continuing their programme of compliance audits for ESOS participants, with compliance audits now being carried out on Phase 2 reports and associated evidence packs.

Why does the Environment Agency (EA) carry out ESOS compliance audits?

The EA is responsible for monitoring compliance with ESOS and therefore audits a selection of participants to ensure they have complied with the Regulations.

The Environment Agency uses a risk-based approach to select participants for audit, using a number of criteria based on the information submitted by participants in their ESOS compliance notification. Typically, the participants with the highest perceived risk are selected first.

Who will carry out the audit?

The audit will be carried out by staff from the EA or equivalent agency or our trained and approved contractors. Please note that all our contractors are bound by confidentiality agreements as part of their contracts with the EA. They have appropriate powers under the Regulations to carry out Compliance Audits on behalf of the EA.

If you are going to be audited by one of their contractors, then they will provide you with a letter of authorisation to confirm this.

Where will the audit be held?

The audit may be held by teleconference, webinar or at one of your sites. Your auditor will advise you which approach will be taken during the initial stages of the audit process. This will depend on the complexity of your organisation and/or the quality of the information you provide in response to their initial information request.

Who should attend the audit?

You can choose who you wish to attend the audit. However, you should ensure that the person/people who attend are familiar with your evidence pack and can explain how you complied with ESOS. Attendees at the audit may be required to locate specific pieces of information within the evidence pack and for a webinar audit, please have evidence available online to share on-screen during the audit.

You can choose to invite your Lead Assessor; however, this is not a requirement.

What information do I need to have at hand for the audit?

If you are being audited by teleconference or webinar, you would need your full ESOS evidence pack which should include:

• ESOS report

• TEC and SEC calculation

• All supporting evidence for TEC (invoices, fuel records etc.)

• Information on the opportunities identified and how these have been assessed.

These need to be available in a format that can be shared electronically with the EA auditor.

How long will the audit last?

The audit itself will typically last one to two hours if held as a teleconference or webinar and three to five hours if undertaken as a face-to-face meeting.

How long will I have to complete any follow-up actions?

Your auditor will provide you with information on any follow-up actions to be completed prior to the audit report being produced.

These are typically requests for further information which was not present in the evidence pack and could not be located during the face-to-face / webinar audit. Your auditor will advise you of the timescale for completing these.

When will I hear about the audit outcome?

Once the face-to-face / teleconference / webinar audit and any follow-up requests for further information have been completed the auditor will prepare an audit report for the EA who will formulate a response on your audit outcome. This will include information on any immediate follow up actions and the timescale for completing these (if applicable) as well as any useful recommendations to help you get the most benefit out of your future ESOS assessments.

What are the ESOS Phase 2 audit outcomes?

Compliant: No issues identified which significantly affect the participant's compliance with the scheme. Only minor compliance issues raised which the participant can correct within future ESOS assessments.

Compliant with remedial actions required: Some issues identified which significantly affect the participant's compliance with the scheme. However, the participant has a useful ESOS assessment, which identifies energy saving opportunities. The issues identified need to be corrected as remedial actions as part of this audit.

Non-compliant: Multiple or large-scale non-compliance. The ESOS assessment and evidence pack does not meet the requirements of the ESOS Regulation. The issues identified need to be corrected as remedial actions as part of this audit. Enforcement action may be considered by the Environment Agency in line with their Enforcement and Sanctions Guidance.

How long will I have to complete any remedial actions?

The audit outcome email and compliance audit report from the EA will contain information on any remedial actions that you have to complete and the timescales for completing them. The timescales will depend on the complexity of the remedial actions.

If you are non compliant or received an Enforcement Notice from the Environment Agency, then please contact us on 03300 881451 for a competitive quotation to ensure that you achieve ESOS Phase 2 compliance in the shortest possible timeframe.

Alternatively, feel free to leave your details on our contact form and we will get straight back to you.



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