The last 18 months have marked one of the most turbulent times in energy industry history. World-renowned energy expert and chairman of IHS Daniel Yergin said, “The energy industry has never faced so many questions about what its future will look like.” In today’s complex operating environment, the Edelman Trust BarometerTM underscores that trust is an asset that enterprises must understand and properly manage in order to be successful. Consider the current dynamics across the sector:
This backdrop and the sense of an industry at a tipping point creates a deep test of trust for existing sector players — and also an opportunity for new leaders to emerge and differentiate themselves. Among the solutions to business challenges must be intentional communications and engagement strategies that build trusted leadership in this time of turbulence. This year, the Trust Barometer’s energy data yielded the following five insights that help focus our efforts.
1. The Energy Halo will Only Take You So Far. Trust in the energy sector is rising among the general population, increasing five points over the last five years to 58 percent. This shows growing awareness of the sector’s power to drive prosperity and enhance quality of life. However, most subsectors, including oil (47 percent), natural gas (56 percent) and cleantech (65 percent), have eased slightly, showing more criticism and skepticism around specific issues associated with the subsectors. Notably, cleantech has witnessed a 3-point decline over the past two years, perhaps a signal that challenges come with maturity. In addition, the broader energy halo is dim — it’s ranked third from the bottom, above pharmaceuticals and financial services.
Companies need to promote the specific positive benefits they bring to the world; and they need to protect their reputation, which is people’s aggregate measure of a company’s past actions. You cannot simply publicize; you must share the depth and breadth of the proposition and be ready to respond to critics.
2. Take Note: The Mass Population is Influential.
For the energy industry, there is a widening trust gap between two audiences: the informed public and the mass population. The 9-point gap that exists today is not a developed vs. developing country issue. It’s not an east vs. west issue. This exists across a mix of economies and it is double-digital in several countries such as the United States, India, Mexico, Australia, Brazil and Singapore.
The energy industry has a history of low engagement, and when it does communicate, it’s largely with investors and regulators — the informed public. The industry needs to prioritize the mass population because it is indeed influential as evidenced by the rise in peer-driven media (e.g., social and search engines) and “a person like me” being trusted just as much as experts. People are engaged more than ever before and even non-consumer facing energy companies need to take note.
3. Solve Problems When Government Can’t. Of 28 countries surveyed, business is more trusted than government in 21; energy is more trusted than government in 24 countries; and public-listed companies are more trusted than state-owned in 21 countries. Business is the leading institution trusted to keep pace with the changing times, whereas government is last. Eighty percent of the general population agree that business can both make a profit and improve economic and social conditions of the community in which it operates.
There is a clear opportunity for business, particularly energy companies, to solve problems when government can’t. They need to take the lead, engage and position themselves as drivers of prosperity, pioneers of innovation and creators of jobs.
4. Bridge Gaps in Trust-Building Behaviors. Building trust at this time in history requires companies to better demonstrate their role in the world. Unfortunately, the findings show that among the general population the industry is falling short of people’s expectations and other sectors on critical drivers of trust. This includes transparency in reporting progress on social responsibilities, which some companies may treat as a box-checking exercise for investors, if they do it all. Also called into question is energy companies’ ability to protect consumer data, a critical area for utilities. The industry also missed the mark in quality control, safety, sustainability and cause-oriented work.
Perhaps even more telling is how the technology industry performed exceptionally well where intuitively one would think the energy industry should. Technology companies have virtually no gap in “making my life easier” and “making me feel connected to something bigger.” To put this in perspective, technology companies enjoy credit for mobile devices connecting us to our friends and family — while a phone bill can be $100/month; yet credit for keeping the lights on or enabling transportation to our friends and family for a similar amount is not a given.
Energy companies must work to fill gaps like these by connecting their core business to issues broader than what is core to their mission — to people’s aspirations for themselves and their families, and to conversations that are happening outside their immediate purview. For example, to earn trust for transparency, a company must evolve its behavior by committing to accurate reporting, then it must use that report to engage key audiences beyond investors.
5. Values and Advocacy Make a Difference. Among the general population, industry leaders help set the values from which all work stems. Employees are a company’s best advocates. For the energy industry, the situation is not ideal. Survey respondents trust energy industry CEOs least among all industries at 46 percent. In 23 of 28 countries, the general population do not trust energy CEOs to do what is right. Meanwhile, 25 percent of employees in the energy industry do not trust their employers.
What do we do about this? The survey shows that people want to hear from CEOs on financial matters; but an even greater number also want to hear what they have to say about societal issues and they want to hear CEOs’ stories — from their values, to obstacles they’ve overcome to their education. When asked about the most trusted spokesperson to communicate around a variety of business topics, people trust employees more than leaders. Notable for the energy industry, senior executives are by far most trusted to communicate innovation efforts — companies would do well to ensure their technical experts are trained communicators. Above all, companies need to visibly treat their employees well — a value that will enable advocacy.
While the energy industry operates at a trust deficit with key stakeholders, it is never too late to begin earning their trust. In this tough time, the industry needs to connect in a way it never has before. Energy companies must engage cross-channel to meet stakeholders where they are and about what most interests and concerns them. Opportunities can be found in connecting to people’s aspirations, larger-than-energy conversations, trends and technologies, political momentum and notable moments in time.
Amy Hemingway, global sector chair for Energy.
Andrew Mitchell, group director, European Energy.