Green Progress Faces Likely Setbacks in Winter
Blog Post03 Nov, 2021
Energy shortages and supply volatility could dampen Europe's green ambitions. This winter, consumers face fuel shortages and high prices, with government warnings that this shortfall could generate a backlash threatening the transition to 100% renewable energy. European energy firms and governments must delicately balance competing stakeholder needs and provide affordable energy to customers while progressing towards long-term climate change objectives.
Competing stakeholder interests pose a unique threat to important European energy goals, including reducing environmental impact and shifting to renewable energy. From a reputation perspective, the Energy industry's weak perceptions across Governance (57.6) and Citizenship (57.1) harm its ability to demonstrate concern for stakeholders and manage its credibility in the near term.
Where does the Energy Industry stand?
European energy companies have an average Reputation Score of 62.5 and trail the global Energy industry (63.9). Since Q1 2021, the European Energy industry's Reputation Score decreased by 3.6-points. The most significant forces for this drop are its Governance (57.6) and Citizenship (57.1) Driver Scores, which saw a 4.4-point and 4.3-point decrease. There are also weak perceptions across critical Factors such as "Is open and transparent" (-3.8), "Has a positive influence on society" (-4.1), and "Acts responsibly to protect the environment" (-5.5).
What is the reputation risk?
While energy prices remain in flux, companies must pay attention to their entire stakeholder ecosystem. Reputationally, companies risk weakening their social license to operate if they don't consider the competing interests of groups such as investors versus consumers. For the Energy industry in Europe, Business Outcome measures "Benefit of the doubt," "Trust to do the right thing," and "Defend company" all saw deficits among advocates between 3.5% - 6% points since Q1 2021.
What should Energy companies prioritize in their communications?
The most significant Driver for the global Energy industry is Governance, followed by Products and Citizenship. The public's focus shifted at the Factor Level as energy prices gained attention among stakeholders; "Offers products and services that are a good value for the money" moved from sixth to first position from June 2021 – Sept 2021. However, "Is fair in the way it does business," "Behaves ethically," and "Has a positive influence on society" consistently remain in the top five most critical Factors. In short, business conduct and societal impact are essential players in shaping the industry's reputation.
Where can your company find an opportunity to weave sustainability into conversations about Energy products?
How can your company increase transparency to stakeholders around Governance and Citizenship initiatives?
What steps are you taking to stand out against other European Energy companies reputationally?