Which energy and sustainability regulations apply to your business?

Business energy and sustainability compliance is nobody's favourite subject. But you can't just ignore it.

You're trying to run your business, serve customers and keep operations moving. That’s what you got into business for, right? Not to wrestle with gibberish acronyms.

Your business is under increasing pressure to comply with sustainability initiatives as the UK aims for Net Zero by 2050.

SECR, ESOS and EPCs are all important - and essential for some businesses - but understanding them feels like a full-time job. You don’t have the time.

You don't need to know every regulation. You need to know which ones apply to you - and what they mean for your costs, risks and opportunities. That’s where we come in. 

In this article:

• Learn about some of the key business energy compliance requirements for UK businesses.
• Understand how your business is affected and what you need to do to comply.
• Discover practical benefits your business can receive from complying with various regulations.

The key business energy and sustainability regulations explained

Here are five of the most common energy, carbon and sustainability regulations your business may encounter:

Streamlined Energy and Carbon Reporting (SECR)

What is it? This requires qualifying UK companies to disclose their energy use and greenhouse gas (GHG) emissions within their annual reports.

Who does it affect? Your business is typically required to comply with SECR if it is:

• A publicly quoted company; or
• An unquoted company with two of the following three criteria:

• • Turnover greater than £36 million
  • Balance sheet total greater than £18 million
  • More than 250 employees

Why is it important? Compliance is legally required for qualifying businesses.

What are the potential benefits of compliance? Effective reporting can also strengthen Environmental, Social and Governance (ESG) credentials, support tender applications, meet supply chain requirements and demonstrate a commitment to sustainability.

Energy Savings Opportunity Scheme (ESOS)

What is it? A mandatory energy assessment scheme that requires qualifying businesses and organisations to audit their energy usage every four years.

Who does it affect? Your business will be required to comply with the scheme if it:

• Employs 250 or more people; or
• Has an annual turnover exceeding £44 million and a balance sheet total exceeding £38 million.

Why is it important? Compliance is legally required. Non-compliance can result in significant financial penalties from the Environment Agency. The assessment may also identify opportunities to reduce energy waste, lower your costs and improve efficiency.

What are the potential benefits of compliance? ESOS identifies opportunities to boost energy efficiency and reduce carbon emissions, which should lead to lower costs and lower environmental impact.

Energy Performance Certificates (EPCs)

What is it? EPCs measure the energy efficiency of a building and give it an energy efficiency rating from A (most efficient) to G (least efficient).

Who does it affect? Most commercial buildings need an EPC when they are built, sold or rented. There are some exemptions, so it's important to check whether your property qualifies.

Why is it important? An EPC is a legal requirement in many property transactions and can affect whether a building can be legally let.

What are the potential benefits of compliance? It can also highlight opportunities to improve energy efficiency and reduce running costs, which could lower running costs and boost the value and marketability of your property.

Carbon Reduction Plan (CRP)

What is it? This is an annually updated strategic document outlining how a business will reduce greenhouse gas emissions to reach Net Zero targets over time.

Who does it affect? This is a mandatory requirement for suppliers bidding for certain UK central government contracts worth more than £5 million per year, subject to change. If your farm or rural business intends to bid for these contracts, you will need a CRP.

Why is it important? As well as being a requirement for specific government contracts, having a CRP is increasingly important for winning other corporate contracts.

What are the potential benefits of compliance? It can also satisfy investors by demonstrating a commitment to addressing environmental concerns. Many lenders also require a CRP for sustainability-linked loans.

UK Emissions Trading Scheme (UK ETS)

What is it? This system puts a price on greenhouse gas emissions from certain energy-intensive industries and power generators. Operators must monitor their emissions and surrender allowances to cover them.

Who does it affect? The UK ETS primarily affects energy-intensive businesses in sectors such as power generation, aviation and heavy industry.

Why is it important? Businesses covered by the UK ETS must comply with monitoring, reporting and emissions obligations.

What are the potential benefits of compliance? The cost of emissions allowances creates a financial incentive to reduce energy use, improve efficiency and invest in lower-carbon technologies, helping businesses reduce their exposure to future carbon costs.

How we can help

It’s tricky to know where to start with renewable energy for business. The boom feels new and overwhelming. There’s a lot of noise. You can’t separate the truth from myths and rumours.

We get it. We can support you.

Troo exists to help businesses like yours make sense of their energy needs, simplify complex information and make smart decisions that lead to real change and reduced costs.

We are not here to sell you a quick fix. We're here to understand what matters to you, offer clear advice, and take ownership of the hard parts, so energy becomes one less thing to worry about.

Book a free energy health check today to explore renewable energy options for your business.