At a global level, the sustainability challenges of eliminating energy poverty, addressing climate change and reducing local air pollution are receiving unprecedented levels of attention from governments, corporations and the broader public. However, within countries that attention is often focused on the most pressing challenge as seen from a national perspective. As a consequence, actions targeting that specific challenge may have an adverse impact on the others; a prime example is the building of coal-fired power stations that make available much-needed electricity locally but increase CO2 globally.
Such conflicting outcomes underscore the need to develop and adopt new products and processes that increase access to energy and reduce levels of CO2 and local pollutants. Very importantly, they also highlight the need for an increased understanding of the individual sustainability challenges, their interdependence, and the importance of joined-up and urgent responses to ensure the earliest and most successful global energy transition. In that context, the need for action by governments and major corporations is widely asserted but, paradoxically, these bodies struggle to gain credibility for their responses to the underlying complex matrix of interlinked issues.
In essence, these difficulties reflect a failure of both parties to engage with the broader public on the energy challenge in a more meaningful and impactful way. Such enhanced engagement, within and across borders, would better inform the related decision-making of governments and corporations and could strengthen the credibility of their consequent actions. What does that mean for the energy industry, and could improving its engagement with the public help to deliver an accelerated and coordinated response to all elements of the energy challenge?
For energy corporations with large scale oil and gas investments, the credibility gap is, to a great extent, a consequence of public cynicism based on their perceived vested interest in the energy status quo. However, there is also a significant impact of communication style: whereas single issue groups such as climate change activists express their views simply, directly and emotively, most corporations struggle to explain their actions on the energy transition and the environment in a way that is readily understood and accepted by the public. As an example, communicating significant investment levels in renewable energies is of interest to the financial community but, in most cases, is met with either disinterest or antagonism by the broader public, e.g. “Why aren’t you investing more?” or “This is just greenwash”. Similarly, it is a challenge to gain acceptance of the important role for hydrocarbon investments as a transitional step to reduce energy poverty in many developing economies, and to ensure sufficient energy supply for sectors that are difficult to decarbonise. Simply sharing a comprehensive portfolio of supporting data will not sway the majority of public opinion; “You’re only saying that because you sell oil and gas”.
These challenges are compounded by the rhetoric of some politicians; there can be political opportunity in laying responsibility for the energy challenge at the door of oil and gas companies. In a recent example a senior UK politician stated the need to “…take on the oil barons and their billionaire backers, tackling both the climate crisis and rebalancing our economy”. Such statements exacerbate an “us versus them” mentality and direct rebuttals have limited impact on public perception.
This demonization of the oil and gas industry will not be countered by continuing to push messages based on the level of investment in renewables or the statistics on energy poverty. Most importantly, it will do nothing to stimulate a well-informed pull from consumers and businesses for new energy products and thereby accelerate a successful energy transition, and it will not build public awareness of the urgent need to tackle energy poverty in many developing nations. There is a clear case for energy companies to engage far more effectively with the public on these subjects.
What, then, is the solution? It is somewhat ironic that one element of the answer is alluded to by that same politician referenced above: “…the only way [to tackle the climate crisis] is to reach out to people who don’t understand about climate change. You’ve got to show people this is going to make their lives better economically….”.
In other words, to be really meaningful to the public, communications on renewable energies need to be expressed in terms of the associated personal and societal impact instead of focusing on the related investments. The messages themselves need to be more simply expressed, emotionally engaging, and less clinical.
The same logic can be applied to energy poverty: messages need to personalize the issues and their impacts on individuals in a range of countries, setting out the scale of such poverty and the challenges to be overcome to ensure its earliest eradication. As an example, there is slowly increasing awareness that 1 billion people around the world have no access to electricity, but very limited understanding of what that actually means for people living in impacted areas.
In essence, this approach requires a shift from communications focused on energy, to communications focused on the individual and their energy-related needs. It may be argued that the oil and gas industry came late to the notion of customer centricity but, for some at least, it is now second nature in their retail and other customer-facing businesses. The mindset and competencies supporting this behavioural transition, from product-push to customer-pull, must be directly applied to the energy challenge to accelerate change. The companies who most effectively deploy their related skills in this area will secure an important competitive advantage and strengthen their corporate reputation.
Corporate global-level communications on responses to the energy challenge have lacked public impact for the reasons set out above. There is a clear need to communicate on a local basis from the perspective of the public in clear language that engages emotionally and rationally. The specific topics to be addressed within a country should be determined based on local energy and energy-related priorities, for example future mobility. The communications themselves should address all of the sustainability challenges as they relate to that topic: local air pollution, climate change and energy poverty. Selected communications from other countries should also be leveraged to convey the diversity of the energy challenge, in particular to ensure that the public in mature economies get a very real sense of the challenges of energy poverty in developing economies.
When the subjects to be addressed have been determined, a detailed understanding of the needs and concerns of the local public must be established for each subject area. There should be no assumptions; getting to the heart of these issues will require market research on each subject to understand what the public really think and the language that they use. Leveraging the results of this research will enable energy companies to enhance their related customer value propositions, and to communicate their commitment to the energy transition in a far more compelling and impactful way. It will offer competitive advantage to those who do it best, and it will enable customers to make more informed choices based on a fuller understanding of the related issues.
Structuring the related market research will require in-depth knowledge of the relevant issues to be considered in each subject area. For example, in the case of future mobility, what are the needs and concerns of consumers in country X that underpin their choice between an electric car or a gasoline/diesel model, and how are these needs expressed? What are their related expectations of energy suppliers and, again, how are these expectations expressed?
Future articles in this series will set out in more detail the issues that should be addressed through such research for a range of subject areas.