A new Brand Finance report reveals that State Grid remains the world’s most valuable utilities brand ranked at USD71.1 billion
11th July 2024, London – China’s State Grid has retained the title of the most valuable utilities brand ranked globally for the seventh year in a row – according to a new report by Brand Finance. It has achieved a brand value growth of 21% this year to USD71.1 billion. In addition, State Grid also continues to be the strongest brand in the ranking, standing out as the only utilities brand with AAA rating.
Edison has the largest brand value growth this year of 118%, to USD2.3 billion. This has allowed the Italian brand to enter the top 50 and become the 31st most valuable utilities brand in our ranking. Edison is followed by EnBW and PSEG in brand value growth. EnBW saw a brand value increase of 42% to USD5.8 billion, largely due to higher congestion revenues from an electricity price differential between the brand’s locale of Germany and its neighbouring countries. PSEG recorded a brand value improvement of 26% to USD1.7 billion thanks to a prosperous financial year.
Due to rising energy prices from the Ukraine-Russia war, many brands in the utilities sector were able to double their revenue, particularly those in Europe. The strong financial performances of utilities brands ranked have resulted in the overall brand value of the top 50 rising by 12%. However, due to governmental capping of prices this year, forecasts have decelerated, combined with expectations that energy prices will drop.
Meanwhile, utilities brands from the US and France showed impressive brand growth, with the two countries being the second and third largest contributors to the total brand value of the sector in our ranking. While the sector in the US is largely driven by the rising demand and price of electric power, the French market is bolstered by the government’s support for adoption of renewable energy and infrastructure modernisation.
Richard Haigh, Managing Director, Brand Finance commented:
“Utilities brands are performing well with an overall brand value growth for the sector. However, brands also need to anticipate a possible slowdown in the upcoming year with the expected fall in energy prices.
“They also need to sustain the industry’s on-going push towards renewable energy integration, of which many brands have already taken steps towards through green energy projects.”
The 2024 Sustainability Perceptions Index finds that in the utilities sector, State Grid has the highest Sustainability Perceptions Value of USD7.7 billion while Enel has the highest positive gap value of USD132 million among brands in the rankings. A positive gap value means that brand sustainability performance is stronger than perceived: brands can add value through enhanced communication about their sustainability efforts, so that perceptions are raised to fully account for the brand’s actual sustainability performance. Enel’s gap value suggests that it could generate an additional USD132 million in potential value through enhanced communication of its impact and accomplishments in sustainability.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
