đ± Is all renewable electricity the same?
Explaining REGOs + how to get curious about your tariff
Happy Monday! Every Monday we suit up and get serious - digging into a climate topic, rounding up the past weekâs Good(s) News and sharing updates from across FTF, so youâre never out of the loop.
We hope you are feeling as energised as we are! Why are we so energised you ask? Well it might have something to do with our shiny new sponsor. Generally though, our team runs on sheer excitement and commitment to spreading sustainability stories and know-how. What kind of energy are you running on? Hopefully the green kind!
If you have calculated your emissions for your brand, you may already have realised that not all renewable energy gets calculated the way youâd hoped. This week, we dig into why that isâŠ
> Sponsor Spotlight
Zevero has worked with brands like MOTH, waterdrop, NICE Drinks and KERB. Today, theyâre inviting Following The Footprints readers (thatâs you) to a free 30-minute call to see how they can help you or answer any burning sustainability questions.
> In Focus
Green Electricity and Grey Areas
According to the latest Net Zero Barometer report by BSI, the commitment of UK businesses to decarbonizing has more than doubled. Hooray! Most of the emissions that consumer goods companies produce come indirectly from their value chain (scope 3 emissions). Tackling these can be pretty complex. There are a TON of moving parts. One area thatâs a bit simpler to address is electricity sourcing (scope 2 emissions). Switching to renewable energy and reducing electricity use are typically the first recommended steps in a brandâs net zero strategy.
Easy, switch to a green energy tariff⊠problem solved! Right??
Itâs not always so straightforward. Letâs have a look at why.
Different types of renewable electricity
Your ideal scenario might have been to generate electricity yourself, like installing solar panels, wind turbines or a small hydro set up. Unfortunately, many brands donât own their own facilities and donât have the support of their landlord to invest in the production of renewable energy. For them, purchasing from an energy provider is usually the only avenue to take. So, what are the next best options? Letâs explore them:
The second-best option: directly or indirectly purchasing from independent energy generators. This means that you or your energy supplier know exactly where the electricity bought comes from. The investment also supports the creation of more renewable electricity. Letâs look at a couple of providers offering this:
Good Energy purchases their electricity directly from a community of over 2000 independent generators. For every kilowatt you purchase through this contract, Good Energy purchases a kilowatt of electricity from these suppliers.
Octopus Energy has a Co-op Community Energy tariff. 100% of the electricity that they supply will come from community-based renewable energy projects. They claim to be sourcing energy from 79 sites across the UK, driving investment into community energy projects.
If you canât purchase from independent or community projects, purchase from companies creating their own renewable energy. These would be energy providers that invest directly into creating renewable electricity. This can be tricky even for the most committed companies, especially at the scale needed!
Ecotricity is a 100% green electricity provider focusing on solar and wind energy. According to their website, they generate about 12% of it themselves and are investing in building new wind and solar sites across the UK. The rest is certified green energy from other green generators or via the wholesale market.
What about the green electricity providers that arenât sourcing or creating renewable electricity directly? They can offer renewable energy tariffs that are backed by Renewable Energy Guarantees of Origin (REGOs).Â
Letâs explain that: if your energy is coming from the grid, itâs coming from a mix of sources no matter what tariff you have agreed on with your provider. Companies that actually create renewable electricity issue certificates (REGOs) equal to the amount they have created. In order to offer you a renewable electricity tariff, your provider buys these certificates to balance the amount of electricity youâve used. The REGO system was established to promote green electricity by offering transparency and assurance about the origin of the electricity you buy. Most energy providers use this approach for some or all of their renewable electricity.
Now, this is the grey area we are talking about! It is possible to reduce your greenhouse gas emissions by buying renewable energy matched with REGOs, but there are some issues. Â
Why REGOs are coming under fire
Because the energy provider can buy a certificate that isnât bundled up with the renewable electricity generated (meaning the certificate is sold in a separate transaction to the energy), there's a risk of double counting and market complexity leading to big price fluctuations. In theory, an energy provider can buy fossil fuel energy as standard and then purchase REGOs when they are at their cheapest to offer ârenewableâ electricity. This can undermine their credibility and lead to manipulation. The focus on trading these certificates also detracts away from the investment needed to shift toward increasing the amount of renewable electricity in the grid. Since the majority of consumers arenât studying the complexities of the energy markets, they might be misled into thinking they are directly using renewable power when that's not always the case. There definitely needs to be more transparency to make the REGO system work!
If you donât have strong enough evidence to show your electricity is backed by REGOs, then you might risk foiling your emissions reductions. How? Without that evidence, your carbon tracking partner may use a residual mix to calculate your carbon footprint. That means theyâre looking at the grid minus the renewable electricity thatâs been genuinely accounted for⊠meaning your accounts show your emissions are higher than the grid average. Not ideal after that effort to get a renewable energy tariff!
Get curious about your tariff
If youâre tasked with measuring the emissions for your brand, you should take a few steps to make sure youâre not falling foul of this:
If you can switch, find a supplier committed to sourcing or creating only renewable energy. Check if they can provide you with their emissions factor. They usually share that in your invoices.
If you canât switch, make sure you are on the tariff with the highest proportion of renewable energy and ask for evidence of the REGOs and their emissions factor.
If youâre locked in through your landlord and canât get hold of the invoices with emissions factors, check your providerâs fuel mix disclosure on their website. This wonât tell you what tariff youâre on, but will tell you what theyâve been buying or generating.
Remember, regardless of what electricity you're purchasing, a great sustainable solution is also using less of it!
Follow up withâŠ
> Last week in consumer goods x climateâŠ
The Good(s) News
Up and coming brandsâŠ
đŻ Mindful Chef partnered with Smurfit Kappa, announcing their sustainable alternative to their insulation pouches and gel ice packs. This 100% recyclable solution with corrugated cardboard insulation packs, which has a 30% lower carbon footprint.
đŻÂ Pollen + Grace announced their partnership with MyEmissions to introduce carbon labelling for their meals. This is based on measuring the whole process of our products from farm-to-store, looking at farming, production, transportation and packaging.
Bigger organisationsâŠ
â ALDI UK announced their paper packaging for their Everyday Essentials Porridge Oats across all of its UK stores, completing all their porridge oat range which are now free of plastic packaging. It forms part of the supermarketâs target to reduce plastic packaging by 50% by 2025.
â LEGO Group announced the launch of its new Supplier Sustainability Programme, requiring their suppliers to provide data on the carbon footprint associated with products and services purchased by LEGO Group. The suppliers must also collaborate with the LEGO Group to develop actions and initiatives to meet reduction goals, such as improving facility efficiency, switching to renewable energy, and finding less carbon-intensive transportation methods.
Industry winsâŠ
âĄïž UK businesses have been urged to embed the circular economy in their operations to cushion themselves from future tax hikes. This call comes from Reconomy, a recycling and waste management services provider, following new data that shows how the environmental tax receipts have decreased in the past year, as businesses integrate sustainable practices.
Want good news sooner? We post our top 5 stories every Friday on LinkedIn! If your CPG brand has good news to share, let us know.đ
> In case you missed it
Want more? Hereâs whatâs happening across FTF at the momentâŠ
Last week we put period care brand Grace & Green under our Brand Spotlight in The Check-Out. Catch up to read about why we are loving this brand and how they are shaking up their marketing is as much about myth-busting and education as it is about promotion.
We shared our July Events Round-Up on LinkedIn, highlighting the most exciting sustainability x consumer brand events this month.
FTF team member Indira is starting a new role at Anthesis Group. Congrats Indira!
Thatâs it for today!
Want more? Check out âThe Check-Outâ this Thursday for the latest brands in our basket. In the meantime, if you have any topics that you would like us to dig into, ping us an email on info@followingthefootprints.com to say hi!
Much love,Â
Team FTFÂ
 | A guest post by
|
A great episode!!