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Consumer Study, Corporate Index Point to Need for Transparency

You're in the grocery store and you are deciding between two products. They're the same price, but only one was made with clean energy. For most consumers, that's a pretty easy decision. It's also a scenario that doesn't quite exist -- at least not yet.

Until the moment arrives when clean energy is the cheaper energy, there’s a growing movement afoot to arm consumers with the information they need to make better decisions. In this case, the question is which corporations to support and the tool is transparency. A new annual index launched by Bloomberg and wind giant Vestas will rank the world’s largest corporations based on their use of renewable energy, both in volume and as a percentage. To bolster the case that consumers worldwide want — and perhaps will soon demand — their products to be made with clean energy, Vestas also commissioned a global study in coordination with Gallup. The findings, released Tuesday, are pretty telling.

Of the more than 31,000 customers surveyed worldwide, 90 percent want more renewable energy and 79 percent of consumers worldwide have a more positive perception of brands produced with renewable energy. They key finding here, though, is that 50 percent say they would be willing to pay more for a product made with clean energy.

Of course, it’s easier to say you’d be willing to pay more for a product than it is to actually hand over the cash.

“What this study proves is that when the day comes that two products cost the same, customers will choose the product made with renewable energy,” said Morton Albaek, senior vice president for Group Marketing and Customer Insight at Vestas. “Corporations not making the change will have a tough time. This is about making a business model that is sustainable for the future."

This is where the corporate index comes in. Maybe corporations will choose to increase the amount of renewable energy used so that they can better position themselves for a changing economy. Maybe they’ll do so to keep up with growing consumer demand. Or maybe they’ll do so simply to keep up with other corporations.

“It’s about sensibility and business coming together,” said Albaek.

Consumer Study

According to Vestas, the survey is the most expansive of its kind. It touches on brand perception, buying habits, social responsibility and even climate change.

Two questions in particular point to a divide between the United States and some developing countries. In the United States, climate change is seen as the single greatest challenge by 7 percent of responders. In China, that number jumps to 53 percent.

“This study confirmed my intuition that [residents see it as a bigger threat] in places where climate change is visible,” said Albaek. “China and India really want to, as consumers, have an impact on climate change. The same goes for Turkey.”

In other words, some of the fastest growing economies have residents that see renewable energy as their future.

Corporate Index

Gallup asked the 1,000 largest global companies to respond to the survey, and 176 so far have responded. The survey began in 2009 and by 2010, there was a 30 percent jump in companies that responded. So what about the other 800-plus?

First, Albaek is expecting a big leap next year. He also feels that the mere presence of the index may spur corporations to either up their renewable energy portfolio, or to consider the benefits of doing so. If they don’t, they may soon have someone else to answer to.

“Consumers need to ask corporations why they are not disclosing this information,” said Albaek.

According to the 2011 Corporate Renewable Energy Index, sector leaders using most renewable energy are News Corp. (Communications), Plum Creek Timber (Basic Materials), Kohl's Corporation and Whole Foods Market (Consumer), CLP Holding (Energy & Utilities), Toronto-Dominion Bank (Financial), Vestas Wind Systems (Industrial) and Adobe Systems (Technology). Whole Foods Market, which uses 100 percent wind energy, was named Global Wind Energy Champion.

Changing Mentality

The launch of the corporate index and the release of the consumer study are part of an effort to increase transparency. Vestas was also behind the recent unveiling of the WindMade label, which will be placed on products that use at least 25 percent renewable energy. Organizations that use 25 percent clean energy to power their business, but not necessarily a specific product, will be able to add the label to places like their website.

“WindMade is the same strategy. It provides facts that enable citizens to act accordingly,” said Albaek. “We believe that as soon as we provide transparency, [corporations] will change their behavior.”

That begs the question -- who drives change, citizens or corporations. According to the survey, it may be neither. When asked “who should play a leading role in adopting renewable energy?” consumers ranked national government the highest at 31 percent, followed by the major economies of the G7 and G12, at 20 percent.

But maybe this is changing. Vestas hopes that the right information in the hands of consumers will empower them to demand change.

“We don’t anymore differentiate between consumers and citizens,” said Albaek. “We used to see them as two different individuals. The citizen and the consumer is coming together as a new stakeholder that is engaged in development and one that knows it can influence societal development through buying habits.”

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