Ofgen: The importance of profit transparency in building consumer confidence

This week Ofgen published its report following the commissioning of the accountancy firm BDO's independent analysis of the big 6 energy companies 2012 performance. BDO reported that disclosure was better than the previous year but that there was still need for more disclosure.

Ofgen seems determined to promote better information on profitability by improving transparency with a view to rebuilding consumers confidence and trust.

While there is no right or wrong profit margin as such, understanding fully the profits a company makes is important in building confidence and trust. The figures revealed that there had been a 17% increase in profits on average in the domestic supply market.

Being able to scrutinise the figures easily simply means that consumers can chose whether to change supplier and, probably more important in a market still essentially stitched up by the big 6, whether the margins are sufficient to attract new entrants who could possibly provide more competitive alternatives.

Transparency and fair treatment of stakeholders are essential in any market to build confidence, trust andsustainable value.