Greenwashing investigation ‘should include energy retailers’

An investigation by the Competition and Markets Authority (CMA) into misleading claims about eco-friendly products should be broadened to include energy retailers, the chief executive of Good Energy has said.

The CMA said its investigation is a response to the growing number of products and services marketed as environmentally friendly, adding that in 2019 £41 billion was spent on ethical goods and services – almost four times as much as people spent two decades ago.

Based on the CMA’s own research and evidence, it is concerned that the surge in demand could incentivise some businesses to make misleading, vague or false claims about the sustainability or environmental impact of their products, such as exaggerating the positive impact a product has on the environment.

The investigation will focus on textiles and fashion, travel and transport and fast-moving consumer goods. However, there have been calls for it to include power suppliers also.

Recently there have been concerns that some energy suppliers are ‘greenwashing’ their tariffs, claiming they are more sustainable than is actually the case.

Renewable challenger supplier Good Energy has previously published a report warning of a recent surge of suppliers buying second-hand renewable certificates in the UK without purchasing any actual renewable power.

Responding to the CMA’s investigation Juliet Davenport, chief executive of Good Energy, said: “This is an important investigation which the CMA should absolutely broaden to include greenwashing within the energy retail market.

“There are more suppliers than ever offering ‘100 per cent renewable’ tariffs, but we know most of them do not even buy renewable power, or offer products which have additional environmental benefit. Recent reports in the media have shown this is an issue that consumers care about, and we know that Ofgem is investigating solutions.

“If the CMA wants to restore consumer trust in green products taking a closer look at the claims of energy companies should be top of the list.”

Good Energy’s concerns about greenwashing are shared elsewhere in the sector. Speaking at Utility Week’s recent Build Back Better virtual event Scottish Power chief executive Keith Anderson called for greater transparency over how suppliers source their electricity to bring an end to greenwashing.

Anderson said the economy cannot be decarbonised without significant investment in, among other things, renewables, the electricity network and storage: “That’s what delivers green electricity; not trading bits of paper; not trading certificates”.

He said the public’s growing interest in and knowledge of environmental issues, in particular following initiatives like the UK’s Climate Assembly, means “they will become more and more concerned about what’s getting called greenwashing.”