Wednesday 22 December 2010

CRC league table ranking will affect consumer buying habits

High-profile brands could be punished by consumers for poor performance in the CRC league tables, according to a new report.

But the survey by Imperial College London Business School and E.ON also found that consumers were twice as likely to feel positive towards brands towards the top of the table and that could influence their buying habits.

The statistics show that consumers are most sustainable-savvy than some companies might give them credit for and will put much stock in schemes like the CRC.

Registration for the Carbon Reduction Commitment closed on October 1 with just over 2,700 organisations out of a possible 3,000-4,000 signed up. The league tables are due to be published next year.

Michael Woodhead, managing director of E.ON's sustainable energy business, said: "What's clear from this study is that companies can't be blasé or take for granted that consumers won't take any notice of how they fare.

"A high position on the league table isn't just a 'nice to have', it could also have a very real impact on their business and on their brand. Each year the new league table effectively puts the organisation back to zero and therefore investment and position over time need to be implemented as part of a long term plan."

The report showed that, while a majority of people were currently unaware of the CRC, companies seen to be doing do well in improving energy efficiency fared considerably better.

In some cases, larger brands felt able to hide behind the fact that it was a parent company listed in the league table, so they felt consumers would not link the parent company with the high street brand.

Lower profile companies, or business-to-business brands, would tend to be highlighted much less frequently as consumers were likely to pick out more familiar names when they looked at the league tables.

The survey found that:

· Consumers are twice as likely to feel positive towards brands at the top of the league table than those at the bottom;

· Well-known retail and consumer facing brands were the focus of attention and are judged against the performance of rival firms

· 78% of respondents said it was important to lower carbon emissions but 60% had never made a purchase based on a environmental standpoint

· Shoppers would change their buying habits if it was convenient, such as possibly converting to rival internet brands

· More than half looked at the total amount of carbon emitted by the company rather than the percentage it had reduced emissions, potentially storing trouble for high emitters even if they had made great strides at carbon reduction.

For many companies in the CRC, the reputation factor was always a boardroom issue. At a CRC conference earlier this year, Paul Clapperton, head of sustainable development at BAE Systems, said the company was "determined the CRC would not be a blot on the landscape".

"We said to the board, 'where do you want to finish in the league table'? You have to set a target and act accordingly," he added.

Bristol City Council's energy manager Paul Isbell said the city was trying to attract green business and, as a 'Green capital' finalist, has a green reputation to preserve, so "councillors are very keen that we put our money where our mouth is. It's not going to look too good if we get fined."

And Marks & Spencer climate change manager Carmel McQuaid stressed that the CRC was very much a reputational issue for M&S: "We said we wanted to be carbon neutral. Once you have said that, you can't go back. Our head is already on the block for delivering that."