According to KPMG, energy customers rate the social and environmental indicators of providers just as highly as financial performance - a sign that there may be other ways to a customer's heart than simply through their wallets.

KPMG believes innovative strategies linked to the environment and social organisations are attractive to both customers and shareholders alike.

"The deregulation of Australia's electricity market is forcing energy retailers to come up with something different. Research shows customers and shareholders care about social issues and the environment," said Ms Lagan.

"Any power company that tries to retain customers solely by locking them into a three-year contract is missing huge market opportunities. There is more to loyalty and market share than financial discounts," she said.

A recent survey of shareholders of the United Kingdom's largest energy company Powergen, revealed 77 per cent of shareholders ranked environmental and social performance at the same level as financial performance.

Ms Lagan said the Powergen survey cast doubt on the general assumption that market share and shareholder satisfaction relies on financial incentives alone.

"Contestability is about a customer's right to choose an energy retailer. Long-term contracts are certainly helping retain existing customers but attracting the new subscribers is where retailers make their money.

"Emphasising environmental and social performance is a customer acquisition opportunity. It translates into improved customer and shareholder satisfaction which means competitive advantage in a very tight market," Ms Lagan said.

Contact: Attracta Lagan, KPMG Sustainability Practice Tel. (02) 9335 810 email: alagan@kpmg.com.au