The energy sector has an image problem, and it has been this way for a long time. Despite our reliance on their products and services, every day energy companies – from domestic suppliers to international oil and gas companies – are facing an uphill struggle to be viewed in a more positive light by a wide range of their stakeholders.
This isn’t an academic concern for Boards and communications chiefs; a poor reputation has been shown to have wide-ranging implications for marketing efficiency, regulation and even social licence to operate.
What’s more, this negative sentiment currently shows no signs of abating. Findings from the most recent Ipsos Reputation Council research – exploring the views of more than 100 senior communications leaders from businesses around the world – show that almost half (48%) think the energy sector faces reputational challenges, up from a third (34%) in 2016.
Two big challenges for the sector
These senior communicators highlight two key areas which are driving controversy and reputation damage for the sector: the environment and consumer concerns.
Firstly, with an ever-increasing focus on the environment and climate change, it’s no surprise that Council Members identify this as one of the main reputational challenges facing the energy sector. Whilst many energy companies are making steps to reduce their emissions, Members would like to see them ‘stepping up’, to recognise their role in the energy transition and to help lead the global agenda around climate change. In a nutshell, the sector needs to demonstrate how it will adapt to meet energy demands in a sustainable way, and then deliver. Although there is some acknowledgement that changes can’t be made overnight, at the moment energy companies are too often “truly seen as part of the problem”.
The topic of energy is one of the biggest and the most challenging. It’s not only about private energy supply, but also…which energy forms we want to choose in the future. Fossil or not fossil... Energy is the biggest challenge, globally.
Concerns for consumers, meanwhile, are particularly evident among Council Members in the UK. During 2018, all the UK’s ‘Big Six’ energy companies have announced price hikes; and the backlash from a wide range of stakeholders (including government) impacts not only the reputation of each company, but also that of the sector as a whole.
To counter the reputational damage, and indeed the resulting regulatory risk, Members believe that energy companies should be more open and transparent, communicating clearly with their customers and explaining why prices have increased – whether this be due to investing in more low carbon energies, increasing overheads, or a change in government policy. At the same time, whilst energy regulator Ofgem has encouraged consumers to switch to avoid facing significant increases, more clarity around what’s on offer is needed from each supplier. This presents energy suppliers with an opportunity to show current and potential customers what they can offer in a clear and consistent way.
Energy companies are seen to be ripping people off. If you are seen to be a company that is ripping off your customers, then you are going to be savaged online. Reputationally that amount of noise if it is really, really significant becomes very, very difficult to fire back.
The current downward trend in the perceptions of the energy sector is, in part, a function of companies within it failing to respond adequately to the rapidly strengthening public interest in sustainability and social responsibility.
Our research among a range of global stakeholders for clients in this sector shows that, to turn their image around, companies need to ensure that people believe their communications, and that they are able to differentiate themselves from others with same message. If successful, this will have a positive impact on a company’s reputation across stakeholders, whether that be the general public, media, civil society influencers, or policy makers.
The Ipsos reputation team works with number of energy companies globally to determine how key influencers view companies, and which messages and actions resonate with them.
This is done through tailor-made research, and through our Key Influencer Tracking surveys. The resultant actions and messages can then be tested and fed back into communications campaigns and business strategy, to promote a clear and consistent message to all stakeholders.