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Beware of greenwashing

17 August 2021

Beware of greenwashing

Often when talking to people about becoming more environmentally friendly the conversation touches on two areas. The more positive one is how ideas and strategies adopted by larger organisations might trickle down to smaller businesses; the other is ‘greenwashing’. 

Greenwashing has been defined as disinformation disseminated by an organisation so as to present an environmentally responsible public image, whereas the real situation might be quite different. 

The Government yesterday announced a review on the ways in which energy retailers market so-called green electricity tariffs to consumers, which could impact on both these areas. 

The review comes against a background of concerns that energy companies could be exaggerating the environmental benefits, and ministers will consider whether there is currently sufficient clarity around where energy on bills comes from. 

Nine million British households are now on green tariffs, with over half of all new electricity tariffs launched now badged as ‘100% renewable’ or ‘green’. The government wants to ensure consumers signing up to a green tariff know their energy is coming from green sources of electricity generation.

Hirers often express similar concerns. For example, an electric car or a battery powered item of plant might offer low emissions at the tailpipe, but considering other factors might create a different picture. How can they be sure that they, and their customers, are really being green?

The eco-friendy qualities of a machine might be considerably less if, say, some components are shipped halfway across the globe and use up scarce materials or minerals that are expensive to extract. 

Energy companies are currently able to market tariffs as ‘green’ even if some of the energy they supply to customers comes from fossil fuels, as long as this is offset by purchasing enough certificates called Renewable Energy Guarantees of Origin (REGO) to cover their customer base. These determine the proportion of electricity that they source from renewable electricity generation. 

REGOs are issued to energy generators by the regulator Ofgem to certify that electricity has come from a renewable source. For a tariff to be badged as ‘green’ or ‘100% renewable’, a supplier must be able to show evidence that they are in possession of enough REGOs to cover the energy consumed by customers on that tariff.  

Some commentators believe this might render green claims by some organisations as being rather disingenuous. 

Options being explored include looking at whether the system around these certificates needs to be improved, as well as whether suppliers need to provide clearer information to households about their green tariffs, including the type of renewable energy used (such as wind or solar), where the renewable power was generated and when. 

Interestingly, the government states that nearly two-thirds (62%) of UK energy consumers say their purchasing decisions are influenced by how eco-friendly an energy tariff is. However, 75% believe suppliers should be open and transparent about their tariffs, including how much of their renewable energy they buy from other companies. 

Similarly, hire companies won’t be the only businesses to express the same concerns about potential greenwashing. 

The Site-Eco section of the blog has already highlighted many instances of how hirers and suppliers are looking at the environmental impact of their organisations and their wider supply chain, which is particularly pleasing. But then again, good hirers have always been pro-active. 

If the scrutiny being applied to energy suppliers’ claims filters down to other industrial markets, that will give the drive towards net zero further meaningful impetus. 

Picture: Science in HD/Unsplash 

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