Green Tariffs alone not enough to attract Environmentally minded consumers

62% of consumers focus on sustainability

The survey, which asked 2,000 UK energy consumers their views towards sustainability and what’s most important to them when it comes to environmental matters shows that the majority now take greater consideration to how green an entire company is.

Gone are the days where just offering a green tariff is enough. Now consumers want to see just how environmentally friendly a supplier is in all aspects of its business.

"With sustainability now at the top of the government's agenda, a mainstream concern in the home and a key driver in purchasing decisions, energy companies need to demonstrate their green credentials clearly, but with many suppliers already providing green tariffs, this is no longer enough to differentiate companies from the competition.

"Energy companies need to catch the attention of consumers by clearly demonstrating an intrinsic commitment to sustainability across all their activities, not just specific products in isolation, or risk losing those customers to more sustainable competitors," said Rob Doepel, energy leader at EY UK & Ireland.

Also read: Green Energy Tariffs rise in importance for consumers, cost of energy bills remains top concern

Opportunity for energy suppliers

Energy suppliers can take advantage of the move towards sustainability and those with the ability to prove that they are legitimately ‘green’ stand to gain in the market.

The EY survey reveals that 62% of consumers are more likely to purchase products and services that are sustainable with 40% the younger demographic of the under 35’s saying that they would be willing to pay premium prices for sustainable energy.

A separate survey of 1.2m people by the UN Development Programme found UK respondents had the highest levels of concern for environmental matters alongside Italy, with 81% across all age groups believing that the environmental situation was an emergency.

In the UK, 86% of under-18s and 78% of over-60s believed this, compared to 69% and 58% as a global average across 50 countries. 

UNDP Administrator Achim Steiner said: "The results of the survey clearly illustrate that urgent climate action has broad support amongst people around the globe, across nationalities, age, gender and education level."

12% of those surveyed by EY also said that sustainability was their primary reason for switching energy supplier.

With the UK government and industry striving towards a NetZero economy, energy suppliers need to get on board if they are to survive and thrive in the energy market of the future.

Despite the obvious benefits and opportunities for energy suppliers the focus on sustainability also poses risks for those too slow or unwilling to adapt.

Nearly a third of the consumers surveyed (32%) said that they had stopped using a product or service due to it not being sustainable.

There has been an issue in the energy supply market of suppliers offering green tariffs that in reality are anything but due to Greenwashing.

Many green tariffs have been proven to be misleading and several energy suppliers have been accused of lying when it comes to telling their customers where their energy is sourced from.

Energy suppliers have also been caught utilising an industry loophole that allows them to buy to cheap renewable energy certificates that allow them to claim they are green whilst at the same time sourcing their energy from fossil fuels.

Also read: Ofgem to increase monitoring of Renewable Energy Guarantees of Origin' (Rego) certificates following Times Investigation

NetZero

The UK government aims to transform how energy is created, stored and utilised over the coming decade and the energy industry is set to experience its biggest shake up in years.

Large scale ambitions such as banning gas boilers in new homes from 2025 and plans to install 600,000 heat pumps a year by 2028 will be immense challenges that energy suppliers are likely to get involved with either through voluntary cooperation or via regulatory means.

There is some scepticism as to whether the ambitious plans will be achieved with some pointing to the difficulties that the smart meter rollout has faced since its introduction. Years late and well over budget will the same happen to the drive toward NetZero?

Further Reading

Is ‘Green Energy’ really good for the environment?

Ofgem Hikes Energy Price Cap raising Energy Bills to pre-pandemic levels

Smaller Energy Suppliers continued to snap up market share in 2020 shows new report

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