ESOS · membership bodies and not-for-profits
ESOS for membership organisations: are you caught?
ESOS asks what a body is and how large it is, not whether it exists to make a profit.
A membership organisation, association or not-for-profit is in ESOS Phase 4 if it is an undertaking that is large on 31 December 2026, or part of a group with one that is.
This page sets out the test as the Regulations write it, and what a caught body must then do.
Who the test reaches
An undertaking, with or without a view to profit
The Regulations apply to a “relevant undertaking”, and regulation 2(1) gives “undertaking” the meaning in section 1161(1) of the Companies Act 2006.
That section reads: “a body corporate or partnership, or … an unincorporated association carrying on a trade or business, with or without a view to profit” (Companies Act 2006 s.1161(1)).
The words “with or without a view to profit” sit on the unincorporated-association limb, so an association that trades is not outside because it distributes nothing.
A membership body that is incorporated is a body corporate, and the profit question does not arise for it.
Nothing in the test turns on being a charity, a members’ club or a trade body, and regulation 16(1) lists only three exclusions: public bodies, undertakings in insolvency proceedings and some smaller group members.
Whether a particular body is a public authority within section 2 of the Procurement Act 2023, the test regulation 16 uses, is a separate question that this page does not answer.
| What the body is | ESOS position |
|---|---|
| Incorporated body (a body corporate) | An undertaking |
| Partnership or LLP | An undertaking |
| Unincorporated association carrying on a trade or business | An undertaking, profit or not |
| Public body within reg 16 | Excluded |
| Anything else | Not answered by the sources read |
The size test
250 people, or both money limbs
An undertaking is large if it meets either the employee limb or both money limbs.
| Limb | Large if | Wording |
|---|---|---|
| Employees | At least 250 persons | Inclusive: 250 qualifies |
| Turnover | In excess of £44 million | Exclusive: exactly £44m does not |
| Balance sheet total | In excess of £38 million | Both money limbs must be exceeded together |
It is not a two-of-three test: a body with 249 staff, £60 million of turnover and a £30 million balance sheet is not large.
The figures are the ones recorded in the accounts for the financial year ending on, or in the 12 months before, the qualification date (Sch 1 ¶5(a)).
Where individual accounts are not required under the Companies Act, a responsible officer must estimate turnover and balance sheet total for a 12-month period that includes the qualification date.
Staff numbers are a monthly average over that accounting period, not a count on 31 December, and a person is “employed” if they are an employee, an owner manager or a partner.
Status also carries over: a body keeps its large or smaller status until it falls on the other side for two consecutive accounting periods (¶11).
“Turnover” takes its meaning from section 474(1) of the Companies Act 2006, with “undertaking” substituted for “company”; this page has not reproduced that section, so check how it treats subscriptions, grants and donations before relying on a figure.
The employee definition lists three kinds of person, and whether a trustee, a volunteer or a seconded worker fits any of them is not answered by the words quoted here.
Whether a charity, a community interest company or a body incorporated by royal charter is an undertaking was not examined; put the point to the compliance body or an adviser.
Groups
A trading arm or a large parent can bring in a small body
A smaller undertaking is also a relevant undertaking if it is a group undertaking in respect of a large undertaking (regulation 15(1)(b)).
That matters to a membership body with a trading subsidiary for events, publishing or training, because the group is tested and the whole UK group participates if any UK undertaking in it is large.
A smaller group member is excluded only where its large parent is in insolvency proceedings and no other solvent large undertaking is in the group.
The group rules are set out in full on the qualification page.
If you are caught
What a caught body has to do
| Step | What it involves | Provision |
|---|---|---|
| Measure | Total energy consumption across buildings, industrial processes, transport and any other purpose | Part 4 Ch 2 |
| Ratios | An energy intensity ratio for each organisational purpose that applies | Reg 25C |
| Significant consumption | Assets and activities making up at least 95% of the total, by units or by spend | Reg 25 |
| Route | An ESOS energy audit, or ISO 50001 certification covering total or significant consumption | Regs 26, 33 |
| Lead assessor | Appointed from an approved register, unless consumption is below 40,000 kWh or ISO 50001 covers it | Reg 21 |
| Savings and last plan | Report savings achieved and review the previous action plan | Regs 27D, 27E |
| Sign-off | A responsible officer signs, or two where the lead assessor is not independent | Reg 30 |
| Notify | Notify compliance through the Environment Agency’s system by 5 December 2027 | Reg 29 |
The duties and dates are the same for a membership body as for any other participant, and each is taken in turn on the lead assessor and sign-off and action plans and progress updates pages.
Failing to undertake an ESOS assessment carries a penalty of £50,000, or such lesser amount as the compliance body determines, under regulation 45, plus a daily penalty and publication, and the full list of offences is on the penalties page and in Part 8.
Beyond the Regulations
ESOS asks for the body’s own energy, nothing more
The calculation rests on the assets the participant holds and the activities it carries on, so the energy members use in their own premises is not part of it.
A body that has been through an audit may well have something to say to its members, but that is a board decision and not a requirement of ESOS.
Our sister site Membership Quest covers the separate subject of new member acquisition, which has no bearing on whether ESOS applies.
For the duty-by-duty walkthrough, see the ESOS Phase 4 compliance guide on uksrs.org.uk.
Frequently asked
Questions people ask
Does ESOS apply to not-for-profit organisations?
It can.
ESOS applies to a large undertaking, and the definition of undertaking in Companies Act 2006 section 1161(1) covers a body corporate or partnership, and an unincorporated association carrying on a trade or business, with or without a view to profit.
The test does not ask whether the body distributes a surplus.
Does ESOS apply to a professional body or trade association?
If it is an undertaking and is large on 31 December 2026, yes, unless it is a public body within regulation 16.
There is no category for professional bodies or trade associations as such, so the body’s constitution and size decide it.
Is there an ESOS exclusion for charities?
Not in regulation 16.
Its three exclusions are public bodies, undertakings in insolvency proceedings and smaller group members whose only large parent is insolvent.
Charitable status is not among them.
What size makes a membership body large for ESOS?
It is large if it employs at least 250 persons, or has an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million.
Both money limbs must be exceeded together.
What if the membership body is small but part of a group?
A smaller undertaking that is a group undertaking in respect of a large undertaking is also a relevant undertaking under regulation 15(1)(b), so a small body can be drawn in by a large parent or sister.
When does a membership body have to comply with ESOS Phase 4?
Size and group structure are tested on the qualification date, 31 December 2026, and notification of compliance is due by the compliance date, 5 December 2027.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
- legislation.gov.ukSI 2014/1643 regulation 2 — interpretation, including “undertaking”
Gives “undertaking” the meaning in Companies Act 2006 s.1161(1).
- legislation.gov.ukCompanies Act 2006, section 1161 — “undertaking” and “group undertaking”
A body corporate or partnership, or an unincorporated association carrying on a trade or business, with or without a view to profit.
- legislation.gov.ukSI 2014/1643 Schedule 1 — the large undertaking test and amounts A and B
At least 250 employees, or turnover in excess of £44m and balance sheet in excess of £38m.
- legislation.gov.ukSI 2014/1643 regulation 15 — relevant undertakings
A large undertaking, or a smaller group undertaking of one, on the qualification date.
- legislation.gov.ukSI 2014/1643 regulation 16 — undertakings that are not relevant undertakings
Public bodies, insolvency, and smaller group members whose only large parent is insolvent.
- legislation.gov.ukSI 2014/1643 regulation 4 — compliance periods, qualification and compliance dates
Generates 6 Dec 2023 – 5 Dec 2027, 31 Dec 2026 and 5 Dec 2027.
- legislation.gov.ukThe Energy Savings Opportunity Scheme Regulations 2014 (SI 2014/1643)
The scheme itself. The consolidated text does not yet show the 2026 amendments.
- legislation.gov.ukThe Energy Savings Opportunity Scheme (Amendment) Regulations 2026 (SI 2026/701), in force 22 July 2026
Every Phase 4 change: routes, savings reporting, the action plan review, the third progress update.
- legislation.gov.ukSI 2014/1643 Part 8 — civil penalties (regulations 39–47)
Five offences; none attaches to action plans or progress updates.
- legislation.gov.ukSI 2014/1643 regulation 45 — failure to undertake an ESOS assessment
£50,000 or such lesser amount as the compliance body determines, plus daily penalty.
- Environment AgencyHow to comply with the Energy Savings Opportunity Scheme (ESOS) phase 4 (30 July 2026)
The regulator’s guidance; a restatement of the Regulations, never the master.
- Environment Agency / GOV.UKEnergy savings opportunity scheme (ESOS): find out if you qualify and how to comply (updated 2 September 2026)
The GOV.UK hub, now a Phase 4 page, and the approved lead assessor register list.