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Green or Greenwashing? Customer Concerns About Energy Giants
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Read MoreRecent research by Good Energy has raised concerns about transparency in the energy market, revealing that one in five consumers believe their energy supplier engages in ‘greenwashing’ – the practice of misleading consumers about the environmental impact of a product or service. The study highlights a lack of clarity in renewable energy claims, with many customers believing they are using 100% renewable electricity when that may not be the case.
As renewable energy adoption grows, consumer awareness is increasing. However, this latest research suggests confusion remains over what truly constitutes renewable electricity, how energy suppliers source their electricity, and whether marketing claims align with reality.
Key Findings from the Research
Misconceptions About Renewable Tariffs
Good Energy’s research surveyed 2,000 consumers, specifically those on 100% renewable tariffs. Over half of respondents (54%) believed their energy supplier sources all of its electricity directly from renewable sources such as wind and solar farms. However, due to the way the UK’s energy market operates, most suppliers buy energy from a general pool, which includes both renewable and fossil fuel-generated electricity.
Calls for Greater Transparency
Consumer demand for clearer communication is evident. The research found that 73% of respondents support stronger regulations on green claims made by energy companies, and 38% believe energy companies are more likely to engage in greenwashing than businesses in other industries. The findings suggest that consumers are wary of sustainability-related marketing and want clearer, verifiable information about the energy they use.
The Role of Renewable Energy Guarantees of Origin (REGOs)
One of the key issues contributing to greenwashing concerns is the use of Renewable Energy Guarantees of Origin (REGOs). REGOs are certificates issued to suppliers to prove that a certain portion of electricity is sourced from renewable generation. However, these certificates can be traded separately from the actual energy supply, meaning a supplier could buy electricity from fossil fuel sources and later purchase REGOs to market the energy as ‘green’.
This practice has led to growing criticism, as it allows companies to brand their tariffs as renewable without necessarily purchasing power directly from renewable generators, hence ‘greenwashing.’ Many consumers are unaware of this mechanism, leading to potential misunderstandings about how renewable their tariff actually is.
The Energy Industry’s Response
The findings have prompted discussions on improving transparency and accountability in the sector. Good Energy has called on suppliers to clearly communicate where their energy comes from and avoid marketing claims that may mislead customers. The company has also implemented new standards for transparency in its own renewable energy supply, aiming to ensure that customers receive electricity backed by genuine renewable purchases rather than through REGO trading alone.
Government regulators and consumer advocacy groups have also acknowledged the growing concerns around misleading green claims. Calls for stricter regulations to prevent greenwashing in the energy sector have grown louder, and companies may soon face greater scrutiny over their renewable energy credentials.
What This Means for Businesses and Consumers
As demand for renewable energy continues to grow, both businesses and consumers must be informed about how energy is sourced and marketed. For companies looking to improve sustainability credentials, choosing suppliers with direct renewable energy purchasing agreements rather than relying on REGO-backed tariffs may offer greater transparency.
For consumers, understanding what makes an energy tariff genuinely renewable is key. Looking beyond branding and marketing materials, checking supplier policies, and reading industry reports can help in making more informed choices.
The Future of Renewable Energy Transparency
The energy sector is at a crossroads, with increasing scrutiny on how companies communicate their sustainability efforts. As the UK works towards Net Zero goals, ensuring that green energy claims are accurate and transparent will be essential in maintaining consumer trust.
While many energy suppliers do make significant efforts to support renewables, the research highlights that more needs to be done to prevent greenwashing and ensure that customers have access to genuine renewable energy options. Stricter regulations, clearer marketing practices, and industry-wide commitments to transparency could help address consumer concerns and strengthen the UK’s transition to a cleaner energy future.
If you’re interested in 100% renewable energy supply backed by REGO certification, our expert team at BP Consulting is here to help. We provide tailored energy solutions to ensure your business meets its sustainability goals while benefiting from a reliable and cost-effective supply.