Reputational risk in CRC league tables

22 December 2010

High profile brands could be punished by consumers for poor performance in the CRC league tables, says a new report by E.ON and Imperial College London Business School.

However, the report found consumers were twice as likely to feel positive towards brands towards the top of the league table compared with those near the bottom and said a high rank could influence their buying habits.
The Carbon Reduction Commitment energy efficiency scheme is a mandatory energy-saving and carbon emissions reduction scheme which ranks major UK companies on energy use and their commitment to reduce their effect on the environment.
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. That’s why we help participants with both CRC management and strategy, so that they can maintain a consistent position in the most cost effective way”
Developed following interviews with CRC participating companies, surveys and focus groups with consumers, and using existing academic research, the report revealed that companies have varying degrees of concerns about the potential impact of the scheme on their reputation.
Consumer studies 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 report also talked to consumers to see what they looked for when comparing the environmental performance of major companies:
 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 percent of respondents said it was important to lower carbon emissions but 60 percent 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.
To download the full results from the research visit: http://www.eonenergy.com/sustainable