Gold is better than bronze, right?
Well, not always.
Under proposals set out this week by Ofgem and designed to slap gold, silver or bronze labels on energy companies' various green energy tariffs, some firms could find themselves deciding that a tariff carrying a bronze label is actually significantly better than one that has been awarded gold.
A system designed to bring clarity to a bewildering market, looks like it could just lead to yet more confusion.
The problem centres on Ofgem's failure to draw a distinction between those green tariffs that work by investing a customers' money in building extra renewable energy capacity and those that invest it in carbon offsets or energy saving initiatives.
According to Ofgem, green tariffs will be rated based on how much money the energy provider is putting into these very different environmental schemes, not the nature of the schemes themselves.
Now, if you are of the view, as many people are, that signing up to a green tariff should represent a means of buying renewable energy at a premium rate that allows you as a customer to support the building of extra renewables capacity then you could find yourself in the bizarre position of having to eschew a gold rated green tariff based on contributions to a carbon offset tree planting scheme in favour of a bronze rated tariff that actually results in extra wind turbines being built.
This is not to say the Ofgem proposals are all bad. The plan to force energy providers to be more transparent about exactly what their green tariffs involve is welcome, as is the move to only accredit those tariffs that deliver environmental benefits beyond those the energy companies are already legally obliged to deliver under the government's Renewables Obligation. But you can't help but feel that the goal of making it easier for the customers to identify the best green tariffs has been missed.
With countless green accreditation, certification and labelling schemes now available the need to closely assess the criteria by which they judge products and services has never been more urgent.
Buying a product with a green label should give you confidence that it is amongst the greenest options available, but sadly this is not always the case and procurement professionals need to be careful not to get caught out.
Detailed, verifiable criteria such as those being used to underpin California's plans for carbon rating labels on car number plates are an extremely valuable tool for changing purchasing behaviour and boosting the market for green product. But too many accreditation criteria are outdated, poorly enforced or just plain lax and in many cases buying a product with a green label is no guarantee that it is really that green. It may negate the purpose of labelling schemes altogether, but it is essential firms take a very close look at the criteria each scheme uses before using them as an indication of green credentials.
Have a good weekend,
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