Examination of Witnesses Question Numbers
169-179)
MR BRIAN
SAMUEL AND
MR MATTHEW
WRIGHT
12 DECEMBER 2007
Q169 Chairman: Can I just welcome you,
Mr Wright and Mr Samuel, to our session this afternoon. I hope
you will bear with us because when we fixed the evidence session
we were not necessarily aware that we would be facing a division
at four o'clock, so I hope you will bear with us if the division
bell goes within the next few minutes or so. I think you have
sat in for some of the sessions we have had this afternoon, but
I just wanted to, by way of welcome, kick right into the session
but just ask if there is anything you wanted to contribute to
our inquiry at the outset, because we are very much aware that
the Energy Saving Trust has been doing a lot of very detailed
work on this subject?
Mr Wright: I think just to say,
to start off with, the purpose of labelling. We absolutely agree,
I think, with the statements made earlier on, in that it is about
helping consumers to make informed product choices both within
a category and also across categories so that they can actually
make that comparison simply and easily. I think labelling is part
of a wider education process of consumers as such and that we
have got to reflect on why consumers are interested in this. In
our particular case it is an interest in energy and the motivations
are likely to be either for environmental reasons or for money
saving reasons. I think it is important to state that as the fundamental
purpose of labelling.
Q170 Chairman: Thank you. I think one
of the things which struck us is that of all the different labels
there have been, home appliance labelling does seem to have been
a big success story in respect of environmental labelling. What
are the lessons we need to be learning from that and why has that
particularly been so successful in influencing consumer behaviour?
Mr Wright: I think it has been
very successful and I think it has been particularly successful
on the larger white goods as such, so obviously fridges and freezers.
What is important to say there is that it is a simple scheme which
has been out there for quite some considerable time. So what we
are seeing is that consumers are adopting an energy-saving interest
actually when they are going to make a product decision. The interesting
point is, of course, that in the very large white goods that is
clear, but part of our role is to see energy labelling broadened
out and what we see is that it is perhaps more difficult to have
an energy label on an MP3 player rather than large white goods
and therefore we just need to understand where the consumer is
on that journey in terms of understanding.
Q171 Chairman: So what lessons are
there for the wider debate about labelling in your experience?
Mr Samuel: I think there are a
couple of interesting features here really. In relation to energy
labelling there are actually two schemes. There is the A-G European
label, which addresses a smaller number of larger energy consuming
products and there are eight product categories, and then there
is the Energy Saving Recommended label which addresses a larger
number of categories, 28, but identifies a simple easy to look
at mark for the best in class of those 28 product categories.
That is a much smaller number, 2,500 products, compared with many
tens of thousands. These labels are complementary. The A-G label
is very slow at change, so therefore the ESR allows manufacturers
to differentiate their products and signposts manufacturers to
the standards three years hence, for example. It is not just a
consumer-facing label but it is an enabling mechanism. It is underpinned
with buyer guides which actually inform the buyers so that they
can make the right choices for their retail companies, and it
is underpinned by marketing activity to provide incentives to
retailers to stock those products. I would add that one of the
criticisms sometimes of the scheme is that there is not sufficient
marketing. We only have a very small budget to do that, but basically
the key message really is that you need to underpin labelling
schemes with other mechanisms. On their own they will not work.
We inform and signpost our consumers to Energy Saving Recommended
through our website and through other marketing material. A simple,
clear to look at sign works very well indeed. For regular purchases
people have a four second window of opportunity to actually look
and make that decision. They are not going to look in detail at
an A-G label. However, an A-G label does actually work at a much
higher European and global sort of level and helps drive standards
as well, so there is a combination there.
Q172 Chairman: Thank you. One last
thought on this series of questions really is, do you have any
competitors?
Mr Samuel: At the moment no, I
would say.
Q173 Chairman: On the horizon?
Mr Samuel: There are a number
of competitors on the horizon.
Q174 Chairman: Who might they be?
Mr Samuel: Obviously you have
the proprietary-type labels, or eco brands, and a number of companies
are looking at energy labelling from that perspective. You also
have the potential carbon label, although I would say that we
are working very closely with the Carbon Trust and we are leading
on the consumer-facing aspects of that label. That label is a
different type of label and we feel very strongly it is best placed
with manufacturers and producers, informing their business as
the SDC pointed out earlier. For consumers, they are much more
interested in energy in use. They do not really understand carbon.
Thirty per cent of people understand carbon. For embodied carbon
it is a very small number of enthusiasts who understand what embodied
carbon actually is. It does not mean anything to consumers at
the moment. That is not to say they should not be educated about
carbon and about the impact it has on their day to day lives through
their homes, their transport and through their purchasing as well.
However, it is an educational process and we are not there yet.
It is something we should aim for and in the future I can see
a move from energy in use to carbon, but we are not there yet.
Q175 Chairman: Did you want to come
in on that, Mr Wright?
Mr Wright: I was just going to
say that at some point without a shadow of doubt the lifetime
use of carbon will be the issue, but very clearly consumers are
at the moment in this quadrant which would be energy in use. The
question is, how do we get there? We can go from energy in use
to carbon in use to total carbon lifetime, or we can go from energy
in use to energy lifetime to carbon lifetime. The question is,
how do you get to that ultimate goal? But at the moment consumers
are telling us it is very much about energy in use. I think it
is also perhaps helpful to say we have had a number of discussions
with the major retailers, particularly those of electrical products,
including in fact Tesco, and what they were telling us was, "Please
keep, in terms of energy, very much along the lines of what we
have. Consumers recognise the EU label, they recognise the ESR
label. Please don't do things which are at the moment going to
have a risk of confusion for the consumer," although they
are saying in the same breath that at some point this carbon lifetime
will have to be considered.
Chairman: Thank you.
Q176 Jo Swinson: A couple of follow-ups
on that. You mentioned the lack of willingness to change the energy
label and you have got a very successful scheme, but you still
think there will be competitors on the horizon. Why are the competitors
not happy with your scheme? Is it because their products do not
come out very well on it?
Mr Samuel: I do not think it is
necessarily that they are unhappy with the scheme. I think it
is more about looking for the eco brand and one of our concerns
is around "greenwash". We have had quite a bit of evidence
that that is increasing. Of even more concern is the fact that
in some companies/organisations the lead department for labelling
activity is the PR department. That is a very worrying trend and
it is not evidence-based.
Q177 Jo Swinson: Absolutely. You
are a big fan of the in-use phase being the key thing with energy,
but in your memorandum you said, "We are concerned that the
inclusion of the in-use phase with embodied carbon in a single
label would be detrimental to changing consumer behaviour".
Why the difference?
Mr Wright: If you look at why
consumers look at labelling, one of the issues, particularly in
the energy area, is the sort of equivalence in a consumer's mind
that if this is not a big energy consumer it is actually going
to save me money. So if we then start bulking in all the energy
that was embedded in the product in its creation, that is not
going to be helpful to the consumer who is making a decision about
that product relative to the amount of money it is going to cost
him in use. Therefore, that is why we see an element of confusion.
Q178 Jo Swinson: That is almost making
an argument for not including embodied carbon, but it is the in-use
phase that you do not want to include?
Mr Samuel: I think what we are
saying at the moment is that it is not ready to have the in-use.
People are much more interested in saving pounds and hence the
translation into saving energy. Again, coming back to Energy Saving
Recommended, that is why that works because people do not know
how it is derived, but they know that that particular product
is one of the roughly 20% best products and will save you energy
and will save you money.
Q179 Jo Swinson: So when we have
carbon budgets that might make sense?
Mr Samuel: If you move to personal
carbon trading or a cap and trade supplies obligation, that provides
a different driver, but again we are not there yet.
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