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Energy Insights

Energy Insights

Insight | Change

Brand strength will help navigate industry transition

Energy brands face a paradox. They are some of the most recognized and valuable brands in the world, but what do people associate with them? Oil and gas. What happens when the products energy brands sell are not oil and gas, but are instead electricity, or a battery, or a charging station? During this transition, energy brands will face new competitors, such as the utilities and, of greater concern, technology brands with a lot of trust and strong balance sheets. Tesla has technology around electric and automated vehicles, along with home energy micro generation and storage. Google has all of the home automation systems. The energy brands need to prepare for this transition in ways that sustain and grow brand value.

Chris Pratt

Managing Director, Energy & Industrials

Hill+Knowlton Strategies

Chris.Pratt@hkstrategies.com

Insight | Renewables

European brands push strategies into renewables

Across the oil and gas sector, companies are considering their future positions. This is seen most clearly in the activities of those with origins and headquarters in Europe, with companies responding to stakeholder pull, rather than simply regulatory push. Shell, Equinor, and Total have all made strategic commitments to addressing climate change and are investing in a way that reflects this. Scandinavian companies DONG Energy (now Ørsted) and Statoil (now Equinor) have divested and repositioned respectively, while Total, BP and Shell have invested in renewables and power, diversifying beyond oil and gas. This trend toward diversification—largely through acquisition—shows no sign of abating.

Kate Gomes

Director, Energy + Industrials

Hill+Knowlton Strategies

Kate.Gomes@hkstrategies.com

Insight | Complexity

Trust consumer with complex progress plans

Consumer sentiment and the 2018 UN Climate report indicate that brands need to respond to concerns about the environment or face the consequences. To be sure, innovation in pursuit of more sustainable alternatives is increasing across categories. For example, IKEA is marketing curtains designed to absorb indoor pollution. Within the energy sector, efforts to use banana skins or algae as a fuel source fits with the larger trend of biomimicry. As this concern emanates from all corners of culture, it is clear that our reckoning with the collective impacts of our own ways of living will continue to shape how people relate to, interact with, choose, or disown brands into the future. Smart brands will take steps to get ahead of that pressure. It goes without saying that action is vital, but for industries like oil and gas—exceptionally easy targets for dismay and disparagement—the opportunity also exists to own the trials of the road ahead and open up to consumers about their ambition and efforts to make a change. This is a time of incredible clarity yet exceptional complexity, and we are all facing up to the environmental fallout of our convenient, modern lives. Entrust consumers with your context and the challenging nature of what must come.

Laura Tarbox

Associate Director

Kantar, Consulting Division

Laura.Tarbox@kantarconsulting.com

Insight | Consumers

Consumer voice is vital to sustain brand operations

The major oil and gas companies are in the best position to invest in scalable alternative energy production. And they are smart enough to know that consumer attitudes are changing, and they need to find new ways to do conduct business. For instance, Royal Dutch Shell foresees a future where it is the world’s largest electric distribution brand. The oil majors still see that the need for their core product will be sustained for decades. Getting the hydrocarbons they produce to market will be contentious, however. People who oppose fossil fuels will look for legal and legislative means to keep oil and gas in the ground. That gives consumers an important seat at the table. The energy companies need public support to secure their license to operate and their ability to transport their oil and gas through pipelines, and their wind or solar energy over high voltage transmission lines. The issues around all forms of energy are complex, and sometimes the reality is obscured, unfortunately. It is fine to have an electric car, but it is also important to know that if fossil fuel produces the car’s electricity, you may be driving a coal-fired Tesla.  

Michael Kehs

Managing Director, Energy & Industrials

Hill+Knowlton Strategies

Michael.Kehs@hkstrategies.com

Insight | Change

Brand strength will help navigate industry transition

The increased importance of the consumer-facing brand will influence the shift to renewables. Shell has developed a strategy around increasing the amount of non-fuel-related activity at its retail locations, which total over 45,000 worldwide. There are at least two questions related to this change. First, how much is it influenced by consumer concern about the environment? Second, how much will the expansion to non-fuel-related activities influence consumers to purchase fuel and other products? Part of Shell’s answer to these questions is illustrated by its ad campaign featuring Jamie Oliver, the British chef known for wholesome, healthier meals and his concern for the future of the planet. By implication, those values are now shared by and products sold under the Shell brand. When the Shell locations have charging stations, drivers will spend longer at the location and have more time to shop for these Shell-branded products.

Steven Brown

Insight Planner

Kantar

Steven.Brown@kantar.com