Utilities brands switching on to power post-Covid recovery
The largest utilities brands in the world are switching-on to a post-COVID future, led by China’s State Grid (brand value up 9% to US$60.2 billion), according to a new report from the world’s leading brand value consultancy, Brand Finance. After a tough 2021 correlated with the pandemic, the utilities sector is powering ahead with the world’s 50 most valuable utilities brands achieving a combined 9% growth this year.
Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes around 100 reports, ranking brands across all sectors and countries. The utilities industry’s top 50 most valuable and strongest brands in the world are included in the annual Brand Finance Utilities 50 ranking.
State Grid is named the world’s most valuable utilities brand for the fifth time in a row. The brand achieved a brand value growth of 9% year-on-year, valued at US$60.2 billion. As the overwhelmingly dominant utilities company in China, State Grid is a powerful brand which is beginning to consider environmental concerns with a commitment to green energy and net zero carbon emissions for the Winter Olympics 2022.
Utilities sector is at the fulcrum of key issues for our society: the recovery from Covid, the conflict in Ukraine, and broader concerns about environmental sustainability in the future. State Grid is obviously a huge brand in a huge market, and will face a challenging future unless they can leverage this brand to deliver for their customers.
Richard Haigh, Managing Director of Brand Finance
In addition to calculating brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Compliant with ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 100,000 respondents in more than 35 countries and across nearly 30 sectors. State Grid is also the strongest brand in the ranking with a Brand Strength Index (BSI) score of 86.4 out of 100 and a corresponding brand rating of AAA. State Grid’s brand strength benefits from its extreme size and geographically confined customer base.
With increasing global demand for environmentally sustainable electricity, industry trends in the utilities sector point towards an increased awareness about green and renewable sources of energy.
China’s Huaneng Power International enters the Utilities 50 ranking this year with a brand value of US$2.6 billion. While over 90% of the company’s electricity generation comes from burning gas and coal, the brand has achieved fast growth (from a relatively small base) in its production of electricity from renewable sources.
Similarly, Indonesian utilities brand PLN (brand value doubled this year to US$1.5 billion) aims to digitise their business supply chain to increase efficiency and reduce carbon emissions with its long-term strategy. The brand has established its target to reach 23% renewable energy usage by 2025, but face substantial technical challenges to do so.
The UK energy provider British Gas (brand value up 154% year-on-year, valued at US$1.3 billion) entered the Utilities 50 ranking as the world’s 50th most valuable utilities brand. This growth in brand value was correlated with British Gas increasing the number of residential energy customer numbers for the first time since 2010, largely due to the addition of over 500,000 new customers from collapsing competitors.
In Japan, energy companies face tough local regulations on the procurement of liquified petroleum gas, ownership and access of energy, distribution of electricity and foreign investment in the sector. The high level of regulations has substantially restricted profit opportunities for several Japanese energy brands, including Kyushu Electric Power, Tohoku Electric Power, ppl, and Fortis, which have fallen out of the Top 50 global rankings.
These regulations are compounded by high global prices for fossil fuels, and Japan has pledged to be carbon neutral by 2050 and is focusing on low carbon emissions and electrification.
NRG Energy achieved an impressive increase in brand value growth of 156% year-on year, valued at US$2.9 billion. The utilities brand’s fast growth can be attributed to its commitment to stay on top of industry trends and adapt to the transition to green energy. The brand is among the largest power generators in the USA, and is diversifying into technology to measure environmental impact. Some of the new customer offerings include electricity planning tools, energy management, carbon offsetting and consultancy services.