On 12 June, Dixons Stores Group International announced that its chief executive, John Clare, would use that day’s international supplier conference to issue a "call to arms" to electronics manufacturers to help phase out the standby function on appliances and introduce energy efficiency labelling for goods such as TVs, DVD players and audio equipment.
Earlier in the year Mr Clare wrote to the government recommending that such a scheme should be similar to the EU energy label, a mandatory scheme giving appliances an A-G energy rating which is already applies to white goods.
Such public support from a leading company for extending a mandatory environmental labelling scheme is almost unprecedented. Even Tesco’s recent announcement that it plans to introduce carbon labelling for all products did not advocate a national, mandatory scheme for all retailers - and the idea seems likely to do more to promote the company’s green credentials than influence consumer behaviour.
But Mr Clare’s speech is a logical move given that DSGi - the UK’s largest electrical retailer - and its suppliers operate in a number of EU countries, and a single pan-European scheme would make life most simple.
The question of how to curb electricity use and carbon emissions is also becoming a competitive issue at a time when electrical retailers are facing growing competition from supermarkets.
And positioning DSGi as a leader on energy labelling is pre-empting something that government pressure may force retailers to address sooner or later.
The consumer electronics revolution
The government’s interest in energy labelling is part of its policy to harness consumer behaviour in its drive to fight climate change.
According to the Energy Saving Trust (EST), the number of appliances in the average home has more than doubled since the 1970s. In recent years this trend has been driven in the UK by soaring consumer spending on electronic appliances such as digital radios, wide-screen TVs and set-top boxes, as well as laptops and home office equipment.
Today consumer electronic and computer products account for 35% of the average household electricity bill and are expected to account for nearly half of all domestic energy use by 2020 (see box, p 32 ).
Changes in the way people use appliances are also pushing up electricity use, says the EST. Computers, TVs and audio equipment are now used in three quarters of bedrooms and almost half of kitchens, as well as living rooms, leading people to forget which appliances have been left on or on standby.
Most consumers believe modern appliances are more energy efficient than older ones, but the reverse is often the case, says the report.
"With trends such as listening to the radio through TV and computers on the increase," said EST chief executive Philip Sellwood, "it’s highly unlikely that consumers realise that this uses far more energy than conventional means." Some digital radios use almost as much energy when switched off at the unit as when they are switched on, while "a new flat panel TV can use up to three times more electricity than a traditional TV".
Focus on labellingThese trends, and their implications for keeping the UK’s carbon dioxide emissions in check, are not lost on the government. Last year ministers asked 11 leading retailers, including DSGi, to commit to a target to reduce carbon emissions associated with the appliances they sell and to discuss ways of extending energy labelling from white to brown goods (ENDS Report 378, p 22 ).
The government now plans to set a series of product energy efficiency standards that businesses will be asked to commit to meet over the next 10-20 years. A consultation paper on proposed standards for consumer electronic products (see box, p 32 ) was issued alongside the energy White Paper in May. Government targets are also promised for the phase-out of the least efficient products, such as conventional light bulbs.
Meanwhile, the government has become increasingly interested in the role consumers can play in reducing carbon emissions, and the information that will help them change their behaviour in terms of the products they buy and how they use them.
This has sparked debate among retailers, brand manufacturers and government organisations like the EST and Carbon Trust about labelling consumer electronics such as TVs and computers. Key questions are whether the EU energy label or the EST’s energy saving recommended (ESR) label should be extended, whether both could be used for the same products without confusing consumers or whether a new labelling scheme is needed.
The EU energy label, which rates a model’s energy efficiency on an A-G scale, is used principally on white goods such as washing machines and fridges. Mandatory for all models of products to which it applies, it has been a legal requirement across the EU for many years and is familiar to consumers. Recently EU energy ministers agreed in principle to expand the scheme.
The ESR label, on the other hand, is voluntary. It is restricted to the UK and awarded to models that sit in the top 20% in terms of energy efficiency. It is available for many non-appliance products, such as insulation and glazing, as well as appliances such as white goods and integrated digital TVs. The EST is extending the scheme to desktop PCs, laptops, computer monitors, digital radios, imaging equipment and microwaves.
In addition, the US Energy Star label is licensed for use in the EU. This is also voluntary, available only for models meeting minimum standards, it applies to office equipment such as computers and photocopiers. Environmental groups have complained the criteria are too weak, but tougher standards for computers take effect in July.
Having three labels is confusing enough, but other retailers and the Carbon Trust have followed Tesco and joined in the discussion about carbon labelling (ENDS Report 387, pp 32-35 ). However, the priority of the Environment Department (DEFRA) remains labels that are limited to showing energy consumed during a product’s use.
The EST has invited retailers to join its new "carbon collective group" to discuss the development of "a broader form" of labelling. However, at this stage it refuses to be drawn on what such a label might look like.
As Europe’s leading specialist electrical retailer, with annual sales of more than £7 billion, DSGi is at the heart of these discussions. Since Charles Kalms opened the first Dixons photographic studio in Southend high street in 1937, the business has grown to include retail brands PC World and Currys, as well as Dixons whose stores have migrated to the internet because of rising rents and a trend towards online purchases of computers and other equipment. It also includes retail brands in other European countries.
In his recent speech, Mr Clare warned the group’s suppliers that "as government urges businesses to lead on this issue, we can expect more scrutiny and regulation in this area" and that "it is critical that DSGi maintains its position as being actively engaged".
One solution from DSGi’s point of view - and that of other major retailers - would be to extend the EU energy label to brown and grey goods. EST research shows that 90% of consumers want to see A-G energy efficiency ratings on consumer electronic goods.
But it will take the European Commission and member states several years to adopt a revised EU energy labelling Directive.
Another possibility is that a different form of energy label, together with minimum energy efficiency standards, will be established as part of a voluntary agreement between the Commission and product manufacturers under the energy-using products Directive. But again, this is several years away.
The most likely outcome is that national initiatives, such as the ESR label, will continue to take the lead in the short term. In February two of Currys’ own-brand set-top boxes became the first in the UK to be awarded the label. DSGi also wants its own-brand IT products to be among the first to carry the ESR label, says environmental manager Vivien Patterson.
Assessing the optionsPC World rejected the idea of using the Energy Star label because it is relatively unknown among consumers, says Ms Patterson. When the company recently tested six desktop computers and eight notebooks it found only four models would meet the new standards coming into effect in July.
The results also revealed that power use varies considerably between similar models. The idle state consumption of the six desktop PCs, for example, ranged from 40.2 watts to 84.3W.
An equally broad range exists for other products, such as set-top boxes, said Ms Patterson. "For some products, the difference in energy consumption between standby and in use is nothing. All standby does is change the colour of the light from green to red. And yet there are other models which sell at a similar price where that isn’t the case."
The company is now developing what it calls "the world’s most energy efficient and environmentally friendly" PC using recycled materials and efficient components to be launched this autumn.
A key feature of the design is that the PC does not need an internal fan to keep the temperature down because the chassis has "gills" to allow cool air to circulate inside.
This reduces power consumption and allows the computer to be small enough to fit behind a flat computer screen on the screen bracket - a feature that will be particularly attractive if the product is installed in the living room, where householders want to minimise clutter.
PC World plans to market the product as a "carbon neutral" PC by buying carbon credits for greenhouse gas abatement projects overseas to offset the CO2 generated by the product’s electricity consumption over its lifetime. The credits will be bought from the Kyoto Protocol’s Clean Development Mechanism.
Currys’ public relations team originally wanted the chain to develop its own environmental label carrying information on energy and water consumption and either ethical sourcing or recycling. A similar scheme is being considered by B&Q, but Currys has put it on the back burner for now.
Another idea is that DSGi’s technical support business, TechGuys, could provide information to householders on the most energy efficient way to install appliances and home-working equipment.
Most of DSGi’s initiatives are happening in the UK because it sells a larger range of own-brand products here than overseas.
Beyond product energy consumption, DSGi is working to normalise environmental data for issues such as CO2 emissions and solid waste across all countries in which it operates. It has established a programme to identify which chemicals of concern are used in its products, has set an 80% recycling target for UK store waste and is the only UK company to offer in-store take-back for old appliances.
It has also worked with the Carbon Trust to reduce energy consumption in its stores and has required each of the group’s businesses to make a commitment to a CO2 saving, which it has not disclosed. So far it has resisted the temptation to announce plans to become ‘carbon neutral’.
In September John Clare steps down after 13 years at the helm and will be replaced as chief executive by Tesco’s operations development director John Browett. Previously chief executive of Tesco.com, where he helped develop the online arm of the supermarket’s business, Mr Browett’s priority will be to do the same for DSGi.
But it is also likely that his tenure will see DSGi work more closely with its suppliers to improve the energy efficiency of its products and to devise ways of providing information to consumers - both in-store and online - that help them take appliance power consumption into account.