Oil & Gas brands: Grasping the nettle?

Norwegian state energy major Equinor has become the latest European energy company to accede to investor pressure over climate change by aligning its strategy with the Paris climate goals and linking executive bonuses to climate targets. It follows leading oil companies BP, Total and Royal Dutch Shell, as well as coal mining multinational Glencore, in addressing environmental concerns through their business actions.

Although Equinor hasn’t promised binding long-term targets and none of the companies will cut production of fossil fuels, they have increased transparency over emissions and started to invest in clean energy. This change follows on from stark warnings by the Bank of England and the Banque de France to ‘raise the bar’ to avoid global environmental catastrophe and suggests that pressure applied by investors is having an effect in Europe. But the picture is very different in the United States, where oil companies show little interest in changing tack and the risk is they could be more exposed should climate-based momentum result in a crackdown on carbon emissions. At present Shell is the only major oil producer to commit to reducing emissions from its products.

Although there is a clear geographic split in the approaches of the main energy companies, our latest FutureBrand Index highlighted that the sector is on the whole moving in the correct direction, whether they are being pushed to act through investor activism or choosing to do so the outcome will be hopefully the same. Perhaps the prospect of being both the problem and the solution to the energy vs. environment challenge has compelled the sector to take the lead on innovation, and they are gaining the associated credit for this. There’s still work to be done however, especially around their individual purpose stories and every day experiences.

The Index showed every oil & gas company in the PwC Top 100 moved up in the rankings, and some have exceeded all expectations. What can other organisations and different sectors learn from these companies which seem to be thriving and raising their brand strength despite operating in such a challenging sector?

Sinopec

Rising an impressive 42 places, China’s state-controlled Sinopec was the biggest riser in the Index, making it one of the most futureproof brands in 2018/9. In line with more positive perceptions of the oil & gas industry, Sinopec is leading with significant uplifts in both purpose and experience attributes, such as having a clear sense of the future, authenticity and employing ‘quality’ people. Interestingly, Sinopec has been the most successful within the sector in convincing that it acts ethically to maintain a sustainable environment.

BP

BP is interesting. With its annual results on the horizon, the City expects another strong 12 months of trading from the company and its short-term fortunes seem positive given it has risen 3 places since 2016 to #97. Its rise in perception is perhaps due to the sense that it innovates usefully. Over the last 3 years it has launched 19 new projects and has a strong growth strategy based on plans to develop its green energy footprint through its solar development company Lightsource BP and investments in electric vehicle technology and infrastructure. On the other hand, people seem less positive towards BP’s experience side with few perceiving it as enhancing people’s lives, their wellbeing or having a clear story – drivers that have grown the most in the Index overall since 2014. These are areas BP should address now while riding high as it is one of the companies in the Index that people perceive as falling behind the most in the future.

Total

While not as dramatic an uplift as Sinopec, the French oil and gas company has moved up the rankings by 19 places to #73. Their highest perceptions in 2018/9 include those associated with useful innovation, trust and authenticity. Its clear communication of short-term climate change goals and a broader plan to reduce the carbon intensity of its products and operations have likely contributed to people perceiving it as moving ahead today.

Shell

It was at the heart of Extinction Rebellion protests in the UK last week but on the whole the perception of Shell can be shown to be improving across the Index’s story, trust, personality, respect and wellbeing drivers despite obvious challenges. Although it isn’t ranked highly against competitors for innovation it has recently made inroads into new markets through a long-term transition into utilities via Shell Energy providing electricity from 100% renewable resources, gas and more surprisingly releasing smart home products to go with its new broadband services such as home charging stations for electric cars. Time will tell whether these are the innovations which consumers are looking for from the energy giant.