Cleaning Up the Future | U.S. Energy Company
Fossil fuels continue to be a significant source of energy in countries worldwide. However, despite the necessity of their utility, Energy companies frequently draw criticism for generating hazardous waste, pollution, and for degrading the environment.
RepTrak’s client was no stranger to this public scrutiny. Between 2014 and 2018, the company contributed to several pollution scandals. On more than one occasion, their power plant infrastructure was compromised and leaked toxic waste material into surrounding waterways and communities.
Sustained scandals over a few short years posed an austere reputation challenge for the firm. The company’s Reputation Score was solidly weak, key stakeholder groups were upset, and public opinions around ESG were poor.
Using RepTrak’s model, this firm began its reputation recovery efforts. But before a reputation strategy could come together, the firm needed to understand how perceptions differed across its key stakeholder groups. To that end – we launched an extensive cross-stakeholder reputation mapping project in Q3 2018.
1. Determined six key stakeholder groups to measure:
IGP (specifically targeting a 6-state region)
Community Leaders (e.g., city council leaders, non-profit leaders, etc.)
Key opinion influencers
Analysis across the key stakeholder groups revealed significant perception gaps. For instance, the firm quickly identified Community Leaders as their biggest Advocates (T2) in support measures – and realized Opinion Influencers and the IGP were their weakest proponents.
Stakeholder perceptions were split between areas of reputation, too. Stakeholder views varied widely on Innovation and Workplace, with some believing these to be strengths and others considering them to be weaknesses.
This study exposed fragilities across the energy company’s reputation, brand expression, and ESG perceptions – but it also revealed shared priorities across the stakeholder groups. Out of a dozen ESG ideals, four ranked highest across all six stakeholder groups in RepTrak’s survey: investing in renewable energy, helping consumers with energy efficiency, providing energy assistance to those in need, and working with local communities for economic development.
2. Optimized communication themes. This firm Identified which ESG concepts were important and overlapped across stakeholders, and critically tied to their reputation weaknesses:
Renewable energy is important to stakeholders Protects the environment is a weak-scoring Factor
Support for local communities is important to stakeholders Positive impact on society is a weak-scoring Factor
Transparency & clarity around plans is important to stakeholders Open and transparent is a weak-scoring Factor
Ultimately, these common themes became the crux of the firm’s 2018-2019 reputation strategy. The energy firm planned several corporate initiatives tied to the ESG concepts that were most important across its stakeholder groups.
3. Planned corporate ESG initiatives in conjunction with an intense 2019 messaging campaign:
Heavily invested in giving through its foundation and organizing volunteer opportunities for employees to improve local communities. Examples include:
Awarded $500,000 in funds and partnered up with two organizations to tackle the U.S. opioid epidemic in regional communities
A $500,000 grant to protect natural wetlands and a new outdoor education park system
A $300,000 award was shared between a dozen organizations to support environmental projects and wildlife conservation
Issued $1.1 million in grant monies to prepare communities for dangerous storms and weather resiliency planning
Announced a new goal to achieve net-zero carbon emissions by 2050.
Accelerated a near-term goal to cut carbon dioxide emissions by 50% by 2030 (previously 40%) and announced plans to double their solar, wind, and other renewables portfolio by 2025.
Broadcast that company emissions reductions helped them achieve the standards of the former Clean Power Plan and the 2025 U.S. commitment to the Paris Agreement.
Reputationally, results indicate that this energy company successfully moved the needle on crucial reputation and support metrics. Specifically:
Between Q1 2019 to Q2 2020, the firm’s average Reputation Score increased by 9 points in the state where the business is headquartered and 6 points in their priority market.
Earned Media Recognition:
Earned positive media coverage in CNBC, CNN, Motley Fool, and amongst industry leaders for ambitious sustainability goals and heralding the end of coal.
More recently, the company’s CEO was awarded the Distinguished Leadership Award by the Edison Electric Institute, with this announcement playing a prominent role. She also ranked in the top 25 on Fortune’s Most Powerful Women’s list, again citing this goal.
Share price increased >10% from September 2019 (i.e., time of announcement) to February 2020 and >30% since 2017.
Improved critical RepTrak KPIs in less than a year:
Reputation Score +6 points, Environmental protection +7 points, Positive impact on society +6 points, Open and transparent +5 points
Reputation Score +2 points, Environmental protection +1 point, Positive impact on society +6 points, Open and transparent +9 points
Some of the lessons learned will be evergreen:
A multi-stakeholder approach isn’t just red tape.
Understanding each of your key stakeholder groups is critical reputation management work. Identifying where the gaps in perception lie is the first step in addressing them. Eventually, stakeholders can become advocates – a valuable asset and reputation buffer for your firm.
Optimizing corporate messaging can accelerate reputation returns.
You can build stronger connections faster when your communications resonate with different stakeholder groups simultaneously.
Communication alone does not improve reputation during a crisis. Actions must follow.
In the wake of scandals, firms must do and say the right thing. Repairing the public’s broken trust takes time, starting with consistency and follow-through.