ESG glossary
REGO
A REGO (Renewable Energy Guarantee of Origin) is a certificate issued by Ofgem for each megawatt hour of electricity generated from a renewable source. Suppliers use REGOs to back the renewable tariffs they sell.
REGOs are how renewable electricity is tracked in Great Britain and Northern Ireland. Ofgem issues one REGO for every megawatt hour (1,000 kWh) of eligible renewable output from an accredited generator. Suppliers then use them to show customers how much of their electricity comes from renewables. Details are on Ofgem’s REGO page.
What it means for a small business
If your electricity tariff is described as 100% renewable, it is almost certainly backed by REGOs. That matters for your carbon footprint, because under the market-based method a REGO-backed tariff counts as zero emissions for Scope 2.
There is a catch worth understanding. REGOs can be traded separately from the electricity itself, so a supplier can buy certificates without buying power directly from a renewable generator. Some critics argue this does little to increase renewable generation. That is why good practice is to report both your location-based and market-based figures, so readers can see the effect of the grid and the effect of your tariff.
Switching to a renewable tariff is still a simple, low-cost step, and many buyers and funders count it positively. Just avoid claiming it makes your whole business carbon neutral.
An example
A small shop uses 20,000 kWh a year on a tariff backed by 20 REGOs. Its market-based Scope 2 is zero. Its location-based Scope 2, using the 2026 UK grid factor of about 0.13 kg per kWh, is roughly 2.6 tCO2e. The shop reports both.
How ESG Now handles it
The ESG Now questionnaire asks whether you are on a renewable tariff. If you are, the report counts it as zero in the market-based Scope 2 figure and still shows the location-based figure, so your report is complete and transparent. Our low-cost ESG quick wins guide covers tariff switching and other easy steps.
Guides that cover this
- Carbon footprintThe carbon footprint of an office-based businessFor most offices, heating and electricity make up the bulk of the footprint, and you can estimate both from floor area if you don't have the bills.Read the guide →
- Carbon footprintScope 1, 2 and 3 emissions explained for small businessesScope 1 is fuel you burn, Scope 2 is electricity you buy, Scope 3 is everything else. Here is how each one applies to a real small business.Read the guide →
- ESG basics15 low-cost ESG quick wins for small businessesFifteen improvements that cost little or nothing, grouped by environment, people and governance. Most can be done in an afternoon.Read the guide →