Ten Insights for Communicators in Energy

Article originally published in Energy Processing Canada's March/April 2015 edition. Visit them online at northernstar.ab.ca 

Energy is fundamental to our quality of life and the conversation surrounding it is one of the most important of our time – especially because that conversation can be a polarizing, emotional debate in which trust is often a factor. 

There is no shortage of factors that impacted the sector this past year, including:

• Dropping oil prices and energy market volatility not seen in recent history;

• Energy security impacts in the Middle East and Russia as conflicts in those regions continue; and

•  The ongoing politicization of the Keystone XL pipeline with U.S. President Obama’s veto of a pipeline approval bill.

All of this is underscored by dynamic energy conversations that are ripe with diverse opinions, active opposition, ample media and online coverage, and mixed levels of business and government action.

Against this backdrop, it is even more important that companies inform and engage in energy discussions with a range of stakeholders – from the private and public sectors, to NGOs and industry groups, to independent experts and ordinary citizens – on how we can pursue energy opportunities while balancing societal, economic and environmental impacts.

Here are 10 insights that help focus our communication efforts in the industry:

1. Globally, trust in energy remains largely unchanged, for now. 

Among the general public, it slipped only one percentage point this year from 61 to 60, but is this the start of a downward trend?

We’ll need to watch how energy companies and others think and act given oil price volatility, which is expected to last for at least six and up to 18 months. For example, will restructuring, decreased investment and layoffs lead to less trust in the coming year? Could lower oil prices slow down growth in renewables and affect trust? Will the low level of engagement in the power sector remain the status quo, which has hindered trust for decades? As the general population sees gas prices rise and fall, will people become more or less skeptical of industry intervention?

2. Trust in energy declined in 60 per cent of countries surveyed 

among general population.

Globally, the shift in trust is not dramatic, but decline is apparent in more than half of the 27 countries surveyed, with significant drops in countries Mexico, South Korea, Argentina, Turkey and Spain. Overall trust is driven up, however, by developing nations, many of which are now experiencing benefits of industrial-scale energy. Companies need to tailor their communications based on a country's energy engagement dynamic.

3. Factors affecting trust in business are relevant for energy.

Energy ranks 10 out of 15 industries in level of trust among informed publics. Energy companies should recognize the halos of more trusted industries like technology, a highly relevant industry for energy, as technology is the bedrock of the industry (e.g., cleantech innovation and carbon capture breakthroughs).

Academic and technical experts are the most trusted spokespeople among informed publics. Many energy CEOs and government officials have engineering backgrounds or PhDs; they should highlight their credentials to help ensure they’re seen as trusted spokespeople.

 4. Trust in energy is local.

Generally, the energy industry is more trusted by the informed public that the general population. However, there are notable exceptions where the gap is much less, for example: UK and Mexico, dead even - U.S. and Poland, or general population trust exceeds that of the informed public, such as Canada, Argentina, South Africa, Ireland.

Energy is a major part of the economy and a significant source of jobs in some of these markets, especially Canada. Therefore, a high trust measure may indicate how intertwined the general population is with the sector – a factor that would presumably increase trust.

5. Trust in energy subsectors is somewhat surprising.

Changes in year-over-year data are not significant for subsectors. Therefore, three new subsectors are in the mix this year to broaden insights: nuclear, cleantech and pipelines.

6.  Layered on top of the trust factor, the energy industry is highly targeted by opposition.

The energy sector is by far the top targeted sector among many others, including finance, healthcare and construction. Eight out of the 20 top targeted companies are energy companies. This underscores that energy  companies must communicate and engage more effectively than ever before in order to build trust in the face of opposition – which affects all subsectors.

7. Trust is essential to innovation, especially for energy.

It’s clear that deficits in trust hinder acceptance of technological advancements. The halos around more trusted industries – especially technology, the most trusted – remain especially important for innovators in energy.

Hydraulic fracturing, while not a “new” technology or a recent development is a perfect example of how it’s not enough to innovate: by the time it became a mainstream topic, those who opposed it had already shaped its negative connotation. The lesson for energy companies is that they must surround innovation with communications to ensure that people understand and appreciate it.

8. Despite calls for more regulation, the energy industry has the license to engage.

Globally, informed publics have a desire for more government regulation of the energy industry and related developments like hydraulic fracturing. However, less than half of survey respondents have confidence in the government’s ability to regulate effectively.

     9. With trust comes responsibility and expectations for good behaviour. 

Globally, the energy industry is doing a good job of making customer’ lives “easier.” However, there are critical gaps in how the general population receives the industry’s focus on “ensuring quality control” and “protecting consumer data.” More trust-building efforts are required in these areas and energy companies should consider how they communicate work that is likely already underway in terms of data security and privacy as well as corporate responsibility.

     10. Trust in government and NGO's as compared to energy is highly relevant. 

In terms of building trust, partnerships with NGO's and government are highly valued.

     Energy companies generally operate at a trust deficit with NGOs. Despite very low trust in government, more than half of people surveyed want to see the energy industry engaging in partnerships with the institution.

Why is trust so important? Trusted companies do better. They are purchased, talked about online, and recommended. When distrusted, the public will not talk or buy and will criticize. The importance of this cannot be underestimated in today’s age of skepticism.

Simply put, energy companies seeking to advance key energy initiatives and technologies – especially in this downturn – must consider this ecosystem of trust and adapt their engagement styles.