Greenwashing: can energy suppliers fill the trust gap?

2 min read published on January 21, 2022
Greenwashing: can energy suppliers fill the trust gap?

The figures are stark for British businesses. 76% of their customers have no idea what the businesses they spend their money at are doing to tackle the climate crisis. Of course, this means that nearly a quarter of customers are aware of companies implementing climate reduction strategies, net zero targets and the like – but of this minority, most don’t believe that businesses will follow through on their commitments.

A recent study commissioned by Business in the Community (BITC) has laid bare the credibility gap faced by the majority of UK businesses. Whether speaking as employees or customers, the British public is cynical about corporate climate action. 

In recent years, people in the UK have become savvier about the claims that businesses make in their marketing. Most of us know that “chemical-free” cosmetics don’t exist and that a bag of frozen peas isn’t any better because someone has slapped a “vegan” label on it. The same applies to vague claims about helping the planet, whether that is “doing our bit for the environment” or “aiming for net zero”. These claims lack any meaning unless they’re backed with hard data: what were the company’s greenhouse gas emissions last year, and how exactly do you plan to reduce them?

Greenwashing fears around REGOs

Even the once-obscure concept of REGOs has received its fair share of media attention around greenwashing, as we explain in our recent report on trends and opportunities for energy retailers. Now a growing number of people understand that when an energy supplier claims its tariff is “100% renewable”, this could be as meaningless as when a sugary breakfast cereal claims to be “healthy”. They know that this green claim could be backed up by genuine investment in renewables generation, but that it’s more likely to be supported through the cheaper and easier route of buying unbundled REGOs. 

This year, comparison site Uswitch launched the first green accreditation scheme, rating suppliers for the greenness of their domestic tariffs as well as allowing comparison on factors such as price. In a world where any domestic energy customer is armed with this kind of information, businesses can no longer get away with ticking a “green” box on energy procurement.

They are coming under pressure from customers, investors and employees to be more transparent about the impact of their choices. This means that in turn, they want more transparency from their energy suppliers."

High-volume business customers are aware that it is a massive challenge to secure a supply that is 100% renewables all the time. They realise that renewable generation sources such as solar and wind don’t function 24/7. What they want is more information about what’s in the mix at any given time, and support to optimise their consumption so it aligns with periods of high renewable (owned?) generation. This applies whether they have a CPPA, a conventional supply contract or a mix of the two. The old model of reconciling consumption and generation at the end of the year is no longer fit for purpose. 

Greenwashing & shaking up the energy sector

Suppliers who can provide the kind of accurate, up-to-date data that businesses need for their climate goals are at a huge advantage in a growing market. To give an idea of the scale of demand, the combined electricity consumption of the brands signed up to renewable electricity pledge RE100 is greater than the UK’s entire electricity use. Our report Trends and opportunities for energy retailers in a net zero market sets out the various forces currently shaking up the energy sector, and explains how retailers can not just weather the storm, but take full advantage of the opportunities. Download your free copy today

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Picture of Jaron Reddy - Business Lead UK

Published January 21, 2022

Jaron Reddy - Business Lead UK