Greenwashing Definition
The definition of Greenwashing is quite simply making something appear more “green” or environmentally friendly than perhaps it really is. This is a trend that has gained ever wider visibility and for some suppliers in recent months, criticism.
Greenwashing has become so prevalent and such a consumer concern that the Competition and Markets Authority (CMA), did an investigation into the green claims businesses were making in 2020 and discovered that over 40% could have been considered greenwashing. On the utility side of things, BEIS and OFGEM are both now looking to clamp down on business green claims. A large proportion of consumer attitude comes from the brilliant body of work done by Scottish Power and Good Energy in their “Come clean on green” Report.
Types of greenwashing
- Misleading labels
- environmental-related images
- Hidden trade-offs
- Claims that are irrelevant
What are the dangers of Greenwashing?
What may seem like a harmless marketing practice or just “stretching the truth” can be far more insidious, we will just focus on the energy side of things for this article. The problem stems from the carbon and physical movement of the energy when generated. With ambitious UK carbon targets there is a risk with the practice of greenwashing being prevalent in our markets today of carbon double counting whereby the developer of the project and another end user claim the carbon savings, thus skewing the reality of where the UK is in achieving its carbon goals. A large proportion of green energy contracts are backed by EU REGOS- which since Brexit, businesses cannot justifiably use the contracts to reduce their carbon emission as they are beyond the same geographical region.
With that said, some carbon accounting being awry is likely lower down on businesses attention right now but it is very much connected with the issue of security of supply, which is being scrutinised, and soaring prices (in part) due to the horrible events unfolding in Ukraine. We have seen a lot of people asking, well if my energy is green why are my prices being impacted so heavily by what’s unfolding in the gas and oil market. Now, without diving into the market pool the fact is that a lot of the green energy UK businesses are buying or rather paying for is largely not physically reaching the UK and so this is the impactful side of greenwashing. This means that the renewable projects being funded are not directly impacting our security of supply.
How to avoid Greenwashing
Have a discussion with a trusted consultant about your current energy supplier and product type to get to the bottom of your current situation. Then Work towards transferring to a PPA-backed renewable tariff so that you can be sure the carbon credits are not being double-counted on.
Ultimately, we feel that the best bet to ensure there is no risk of double counting or greenwashing is for businesses to generate their own energy wherever possible from renewable sources, we have some businesses already covering 70% of their baseload energy with their own unequivocally green and cheap solar energy.
