The global Utilities market finds itself grappling with the wide-ranging repercussions of Russia’s war in Ukraine.
As a result, energy prices are surging, and European governments are shifting their focus from Russia to domestic and other European energy providers.
According to recent research by brand valuation consultancy Brand Finance, this shift has fuelled an impressive average year-on-year revenue increase of 21% for the brands featured in the Utilities 50 2023 ranking.
The heightened profitability experienced by these brands has come at a cost, leading to a decline in brand equity within the Utilities ranking.
This downward trend is apparent through an average decrease of 4% in the Brand Strength Index scores.
Consequently, the growth in revenue has not been fully translated into brand value growth, as evidenced by a mere 3% aggregate increase across the ranking.
State Grid is the world’s most valuable and strongest Utilities brand, valued at USD58.8 billion.
China’s State Grid is the world’s most valuable Utilities brand for the sixth consecutive year, despite a marginal 2% brand value reduction to USD58.8 billion.
Its brand is still worth over USD47 billion more than both the second and third most valuable Utilities brands, Enel (brand value down 13% to USD11.7 billion) and EDF (brand value down 4% to USD11.7 billion).
Every year, Brand Finance puts 5,000 of the biggest brands to the test, and publishes over 100 reports, ranking brands across all sectors and countries.
The world’s top 50 most valuable and strongest Utilities brands are included in the annual Brand Finance Utilities 50 2023 ranking.
State Grid owes much of its brand value to its dominance in the Chinese utilities market.
However, China’s extended struggle with the Covid-19 pandemic has created a difficult operating environment for State Grid throughout 2022.
Despite these challenges, State Grid’s 2% brand value reduction is mostly caused by the depreciation of Chinese Yuan against the US Dollar.
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 38 countries and across 31 sectors.
As well as being the most valuable Utilities brand, State Grid is also the strongest.
It has a Brand Strength Index score of 86.9 out of 10 with a corresponding AAA brand rating, and it is the only Utilities brand to achieve AAA brand rating status in the ranking.
RWE is the fastest-growing Utilities brand, up 116%, as German brands prosper.
German based brand RWE is the fastest growing brand, up 116% to USD2.3 billion.
RWE is also a new entrant in the ranking, coming in at 29th position, and is one of a number of high performing renewable energy focused brands in the ranking.
RWE has financially benefited from favourable conditions on the German power generational market, following a widespread divestment in Russia.
Resultantly, German Utilities brands have experienced a remarkable surge in both their performance and brand value.
The aggregate brand value growth for the four German Utilities brands included in the ranking was 64%, making it the fastest growing country in the ranking.
Fellow German brands E.ON (brand value up 13% to USD6 billion), EnBW (brand value up 91% to USD4.1 billion), and Uniper (brand value up 52% to USD3.6) have all made significant gains.
Chinese solar energy brands light up the Utilities ranking
As Utilities brands continue to transition to a more environmentally friendly future, 2023 saw a notable surge in the growth of renewable energy focused brands in the Utilities 50 2023.
This included two Chinese new entrants; Solar energy providers and manufacturers, Longi (new entrant at USD3.4 billion) and JA Solar (new entrant at USD1.5 billion).
Richard Haigh, Managing Director of Brand Finance, said: “The global Utilities industry is increasingly transitioning to a more sustainable future in which brands are upping their investment in renewables, while phasing out reliance on non-renewable energy sources.
“The Utilities 50 2023 ranking reflects this change as many brands double down on greener strategies and the communication of this to stakeholders, while renewables focused brands are increasingly seeing brand value growth and becoming more influential and valuable.”
State Grid has the highest Sustainability Perceptions Value and Score
As part of its analysis, Brand Finance assesses the role that specific brand attributes play in driving overall brand value – one such attribute, growing rapidly in its significance, is sustainability.
Brand Finance assesses how sustainable specific brands are perceived to be, represented by a ‘Sustainability Perceptions Score’ (SPS).
The value that is linked to sustainability perceptions, the ‘Sustainability Perceptions Value’ (SPV), is then calculated for each brand.
As well as being the most valuable and strongest brand, State Grid also has the highest Sustainability Perceptions Score in the ranking, at USD7.4 billion.
State Grid’s position at the top of the SPV table is not an assessment of its overall sustainability performance, but rather indicates how much brand value it has tied up in sustainability perceptions.
The brand’s Sustainability Perception Score was 5.64 out of 10, also the highest in the ranking.
