The base criteria are any UK undertaking that employs more than 250 people and/or has a turnover in excess of ?50 million and/or has a balance sheet total greater than ?43 million. There is little point in attempting to separate off high polluting areas. If one corporate group qualifies for ESOS, then all the others are obligated to take part too. The sterling equivalents of ?38,937,777 and ?33,486,489 were set on 31 December 2014 and apply to the first compliance period.
Representatives of Overseas Entities
UK registered branches of foreign entities are treated as if fully UK owned. They also have to sign up if any overseas corporate element meets the threshold no matter where in the world. The deciding factor is common ownership throughout the ESOS system. ecoVaro appreciates this. We have seen European companies dumping pollution in under-regulated countries for far too long.
Generic Undertakings that Could Comply
The common factor is energy consumption and the organisation’s type of work is irrelevant. The Environmental Agency has provided the following generic checklist of undertakings that could qualify:
| Limited Companies | Public Companies | Trusts |
| Partnerships | Private Equity Companies | Limited Liability Partnerships |
| Unincorporated Associations | Not-for-Profit Bodies | Universities (Per Funding) |
Organisations Close to Thresholds
Organisations that come close to, but do not quite meet the qualification threshold should cast their minds back to previous accounting periods, because ESOS considers current and previous years. The exact wording in the regulations states:
?Where, in any accounting period, an undertaking is a large undertaking (or a small or medium undertaking, as the case may be), it retains that status until it falls within the definition of a small or medium undertaking (or a large undertaking, as the case may be) for two consecutive accounting periods.?
Considering the ?50,000 penalty for not completing an assessment or making a false or misleading statement, it makes good sense for close misses to comply.
Joint Ventures and Participative Undertakings
If one element of a UK group qualifies for ESOS, then the others must follow suit with the highest one carrying responsibility. Franchisees are independent undertakings although they may collectively agree to participate. If trusts receive energy from a third party that must do an ESOS, then so must they. Private equity firms and private finance initiatives receive the same treatment as other enterprises. De-aggregations must be in writing following which separated ESOS accountability applies.