Enable the Label: Blue chips shine light on electricity labelling

Some of the UK's largest organisations have today (9 July) called on the Government to simplify carbon reporting for businesses, proposing that the introduction of an 'electricity label' will bring much-needed transparency and better communication to stakeholders.

BT, Sky and HSBC were among a consortium of firms that commissioned a report called Enable the Label, which recommends that businesses speak to their energy supplier to adopt an electricity label and help to transform the energy market.

The Government’s current system of so-called ‘green’ tariffs is being scrutinised for a number of ‘inconsistencies’. The steering group says the way that organisations currently report the carbon emissions associated with the energy that they purchase provides relatively weak and complex signals, leading some boards to retreat from investing in renewable technologies.

Enable the Label: The case for electricity labelling in the UK states that an electricity label would address these concerns by clearly displaying the quantity and carbon content of electricity sold on each customer’s bill. This would provide accurate information about the carbon emissions for which each customer is responsible, standardise the reporting of electricity use and increase transparency.

The report concludes that an electricity label could increase purchase of low-carbon electricity in the commercial sector four-fold. This would encourage development of new sources of low carbon power, as well as delivering transparency in corporate reporting and clarity in purchasing decisions.

Reputational benefits

Caroline Pitt, head of consulting & strategy at Utilyx – which produced the report – said: “The electricity label could help businesses with their purchasing decisions by opening up a new line of dialogue with their energy supplier. Our analysis shows a number of potential benefits of adopting a label, such as increased transparency, better communication to stakeholders and reputational benefits.”

The Aldersgate Group, which is among the businesses behind the report, believes the Government and industry need to work together to ‘shine a light’ on the associated carbon emissions of energy purchases by adopting an electricity label.

The Group’s executive director Andrew Raingold said: “Our analysis shows that this will lead to more informed procurement decisions, driving much needed investment in renewables and reducing demand for shale gas or dirty coal.”

BT’s adoption

BT is the largest buyer of renewably sourced power in the country and is the first company in the UK to adopt an electricity label. The label is published on BT’s energy bill and allows the firm to communicate the sources of the energy it buys transparently to stakeholders.

Npower’s manager of structured products Vishal Sharma said: “We were delighted to support BT in becoming the first company in the UK to adopt an electricity label of this design.

“The label is beautifully simple and universally recognisable. Reporting a carbon footprint is complex with businesses facing multiple considerations, which is why the electricity label is great way to tackle the question of the source of your energy.”

Enable the Label was launched at a breakfast event for business leaders at Ernst & Young’s London offices earlier today.

Luke Nicholls

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