In a desperate bid to stabilize the world’s climate, governments and organisations across the globe are pledging to achieve net-zero emissions of greenhouse gases. Through their consumption behavior, households are responsible for a massive 72% of current global greenhouse gas emissions1. As consumers and citizens, individuals are therefore key actors in reaching the 1.5°C goal under the Paris Agreement. And thanks to their direct link with the general population, utilities have a significant and important role to play in fulfilling the world’s net-zero ambitions.
“The goal of net-zero emissions can be reached only if people adopt new behaviors and consumption patterns, such as switching to electric vehicles and renovating or retrofitting homes for energy efficiency.”
Managing the net-zero transition – actions for stakeholders, McKinsey
Ofgem agrees with this view. It says “As a nation, we’ve made significant progress in decarbonizing our economy. Overall emissions have fallen by 40% since 1990; but this progress has been largely from changes that have not involved consumers changing their behavior, notably decarbonization of electricity supply. If we are to meet our 2050 goals, changes will be needed to how homes are heated, and transport needs to transform. Consumers will have a role to play in engaging with new technologies and taking action to support decarbonization.”
The problem is, although most people acknowledge some need for change on their part, decarbonization isn’t a high enough priority, and many people are concerned how much any changes would cost them financially.
According to Ofgem’s Consumer Attitudes Towards Decarbonization and Net Zero report, “Many feel they are very unlikely to make changes to their current energy supply or system without support or guidance. Overall, while most people are supportive of the targets and are aware things need to change in order to prevent further climate change, they are put off by the impact that decarbonizing might have on their own lives in the short term.”
Ofgem’s research revealed that many consumers support, in theory, societal change that leads to decarbonization, yet current levels of awareness and participation in actions required are low. The regulator suggests that most consumers are just at the start of the journey in understanding and accepting that they have a role to play if the UK is to achieve its net zero goals.
The research also revealed that generally people “support societal change that would lead to decarbonization. They were willing to make some changes in order to move towards this goal, as long as they received support to do so.” According to Nesta, 83% of consumers say they are open to adopting energy efficiency measures2.
Taking customers on a decarbonization journey
So how can utilities help encourage their customers to make the required changes? They need to help educate their customers and take them on a decarbonization journey.
Every individual is at a different stage in their education and understanding of what needs to be achieved and the important role we each have to play. From switching old light bulbs to LEDs and buying more energy efficient white goods, right through to installing a heat pump or buying an electric vehicle – utilities need to target the right people with the right messages to take them on their personal decarbonization journey.
And the way to do it is rooted in data.
With data as its solid foundation, there are three key building blocks to a successful sustainability and decarbonization program.
- Data science
- Segmentation
- Behavioral science
Building on a solid foundation
It all starts with data. Data is something that utilities have plenty of – but too many are wasting it. We can help you to collate and combine historic and real time billing and meter data with data collected from our home surveys and audits, as well as relevant third party data. With the help of data science modelling we can extract valuable insights relating to individual customers, their households, their consumption patterns and their behaviors.
As we’ve already identified, a successful decarbonization journey relies on targeting the right customers with the right messages. Lower income families may not be ready to trade in their old car for an EV, but they would certainly benefit from the cost savings that can be achieved by replacing old light bulbs with LEDs and changing their daily habits to reduce their energy or water consumption.
Sending the wrong messages to the wrong customers will only serve to alienate them. So don’t send information relating to solar panels to homes that already have them installed or to people living in flats or rented accommodation. Don’t send information about energy saving white goods to households on the Priority Services Register or those who have requested a payment break. That is where trust in your organisation and your program will be broken.
Profile and segment
To make sure you send the relevant information and advice to the right customer you must profile them and segment them. We can help build individual customer profiles with accurate detail relating to their household and their consumption patterns. Subgroups of consumers can then be identified, allowing you to proactively target subsets of customers with appropriate messages.
The behavioral science bit
And that’s where the third building block comes in – the behavioral science bit. We apply the behavioral science based theory of ‘nudging’ to all our customer engagement programs – with proven success. Nudging is based on the theory that people are often unable to make good decisions when they lack experience, context, knowledge, or are overcome with inertia.
More often than not, we allow our autonomous nervous system to make decisions on our behalf, bypassing the conscious thinking process. The solution involves guiding people in the right direction – towards the more beneficial option, which for the purposes of climate change and energy transition goals, is towards saving energy. You can read more about the theory of nudges in our blog, ‘How a nudge can help your customers save energy and water’. Over a decade of behavioral economics research has revealed that ‘nudges’ are highly effective in influencing consumer behaviors.
To date, most of the progress in working toward the 2050 net zero emissions target has come from the decarbonization of electricity supply. Moving forward, consumers will need to take on a greater role. The good news is, the public are increasingly aware and supportive of the need to live more sustainably.
How will you help your customers take on more responsibility? How will you educate and inform them on their decarbonization journey? Let us help you build on the solid foundation that you already possess – your data – and engage your customers with appropriate and meaningful insights and information to help them make the changes that our planet needs. Get in touch today!
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1https://www.sciencedirect.com/science/article/pii/S2214629618310314
2https://www.nesta.org.uk/report/decarbonising-homes-consumer-attitudes/