Download SOURCE: Forrester Research, April 2006

Communicating the Strategic Implications
of Climate Change Action in Petroleum & Energy
Industries: Current Dilemmas, Future Outlook
Jacob Park
Assistant Professor, Business & Public Policy
Green Mountain College (Vermont, USA)
E-mail: [email protected]
Presentation @ 13th Annual Conference
of the Greening of Industry Network
Cardiff University, Wales/UK
July 4, 2006
Presentation Outline
•
Business of Global Climate Change: Changing
Context for Petroleum & Energy (PI) Industries
•
Communicating Climate Change Action in PI
Industries: Assessing Current Approaches
•
Public Communication and Outreach in an
Age of Social Computing: Examining the Strategic
Implications for Firms and Industry
Business of Global Climate Change:
Changing Context for the PI Industries
Kyoto Protocol, in force since February 2005, encourages the participation of
private and non-governmental actors through its ‘flexible mechanisms’
Increasing business awareness of and global public pressure for
‘beyond compliance’ climate change action
Companies in the PI industry are arguably the most ‘transparent’ in terms of
traditional environmental/sustainability reporting. But, environmental advocacy
groups regard PI companies, particularly ExxonMobil, as eco-unfriendly
‘carbon dinosaurs’
ExxonMobil: Case in point, check out: http://www.exxposeexxon.com/movie
BP (‘Beyond Petroleum or Beyond Preposterous?’ - CorpWatch, Dec. 2000)
Firms in PI industries still have NOT meaningfully engaged the public
in four key sector-related climate change dilemmas
1. Private sector is a leading source of international GHG emissions
22 percent of world’s carbon production can be traced to 20 companies,
while nearly 47 percent of the global carbon emissions can be traced to 20
private and state owned energy enterprises
•
2. Many PI companies have a disproportionately large global carbon footprint
The 1997 carbon footprint of BP would equal 3 percent of the world
carbon emissions for that year
•
Exxon Mobil’s 1997 carbon footprint would exceed the combined
annual emissions of Indonesia, Malaysia, Thailand, and the Philippines
•
SOURCE: NRDC et al (1999) Kingpins of Carbon: How Fossil Fuel Producers
Contribute to Global Warming and others
3. Although majority of Americans regard climate change to be an important
public concern, the American public (unlike most of Europe) is very divided
in terms of what constitutes the ‘appropriate’ climate change action
ABC News/Washington Post Survey (September 23-27, 2005)
“Do you think global warming is an urgent problem that requires immediate government
action, or a longer-term problem that requires more study before government action is taken?”
Urgent problem 41% Longer-term problem 47% Not a problem 6% No opinion 6%
4. Global energy consumption and GHG emissions (even with Kyoto Protocol)
between 2005-2030 are expected increase rapidly
Communicating Climate Action in PI
Industries: Assessing Current Approaches
Four Types of Risk Communication Situations
•
Public Relations: High Hazard, Low Outrage
A particular issue is of high risk to a firm or an industry, but the public awareness is low
and/or apathetic
•
Stakeholder Relations: Moderate Hazard, Moderate Outrage
Unlike the public, stakeholders are an attentive audience, neither too apathetic nor
too upset to listen.
•
Outrage Management: Low Hazard, High Outrage
A group of individuals or the public at large is upset with your company and/or industry,
although this anger is not likely to be much consequence to the company
•
Crisis Communication: High Hazard, High Outrage
There is no ‘public’ in a crisis situation; everyone is a stakeholder. Crisis communication is
very different from routine public relations, though it is often treated one and the same
(Adapted from Peter Sandman 2003 [http: www.psandman.com])
BP: Public/Stakeholder Relations Approach
TV Ad: Do you believe in global climate change?
"I guess as I get older yes I am starting to worry about the
environment now, the global warming." Cab driver, London
"We’re destroying the capability of the planet to heal itself."
Man, Chicago
"It’s something we need to deal with and we need to deal
with it today." Woman, London
Our action:
We were the first major energy company to publicly
acknowledge the need to take steps against climate change.
Our energy efficiency projects have reduced emissions by
over 4 million tonnes since 2001.
It's a start.
Shell: Stakeholder/Public Relations Approach
According to Shell, the company ‘shares concern’ that carbon emissions from vehicles
and industrial activity are contributing to global climate change
Carbon Trading
Carbon Trading is the buying and selling of allowances for producing carbon
dioxide emissions. Garth Edwards has seen how carbon trading encourages
companies to reduce their emissions.
Energise™ for lower emissions
Energise is a programme for conserving energy and reducing emissions at our
facilities worldwide. Livio Accattatis advises us where and how energy efficiency
can be improved.
Preparing the way for hydrogen
Hydrogen fuel can power vehicles, with the only emissions being heat and water
vapour. It is widely tipped to be a fuel of the future. Rick Scott is already installing
hydrogen pumps in Shell refuelling stations.
Cleaner transport
As China’s economy continues to grow, so does the demand for energy. Discover
how Han Juan is working with the Shanghai Government to find cleaner energy
solutions for China’s thriving cities.
Chevron: Public Relations/Outrage Management Approach
ExxonMobil: ‘Not my sole responsibility so no
need for a firm-level communication’ Approach
Question posted on the company website: “Why won’t ExxonMobil recognize
that climate change is real and take actions to support the Kyoto Protocol?”
Opposition to the Kyoto Protocol does not equate to a lack of concern about the
environment or the issue of climate change. In fact, quite the contrary. ExxonMobil
recognizes the risk of climate change and its potential impact on societies and
ecosystems, and we continue to take actions and work with others to address that risk.
US-based Anti-Climate Action Advocacy Group’s
“We Call It Life” Campaign Approach
Source: Competitive Enterprise Institute (http://www.cei.org)
Public Communication and Outreach in an
Age of Social Computing:
Examining the Implications for Firms and Industry
Key Question: Will and to what degree is the current
situation (HIGH business hazard, LOW public outrage)
likely to move toward greater business salience and
strategic involvement in climate change action (HIGH
business hazard, HIGH public outrage)?
Towards a New Strategy of CSR Communication
and Outreach in an Age of Social Computing
Current Communication &
Outreach Strategy
Info. Channels
• TV/cable
• Radio
• Magazine
• Newspaper
• Outdoor
• Direct mail
Tactics
• Coupons
• Customer promos
• Trade promos
• Sales force
Metrics
• Reach
• Frequency
Communication & Outreach Strategy
in the Age of Social Computing
Info. Channels
• Web site
• Online ads
• Email
• Blogs
• Interactive TV
• Podcasting
• Mobile ads
Technology
• Personalization
• Search
• Site merchandising
• Customer database
• Web analytics
• Brand monitoring
• Content syndication
Metrics
• Conversion rates
SOURCE: Forrester Research, April 2006
CSR-focused Blogs and Social Computing Tools
SOURCE: Forrester Research, April 2006
Key Social Computing Drivers
Consumers’ trust in institutions is falling
Only 42% of consumers say they even “somewhat” trust newspapers.
Consumers are less brand loyal
52% of consumers say brand trumps price, down from 59% in 2000.
Consumer-to-consumer activities are taking off
C2C eCommerce, messaging, blogs, camera phones, video phones
Consumers are customizing products and services
10%-40% of customers develop or modify products.
SOURCE: Forrester Research, April 2006
“I trust” ___
Recommendations from friends/family
Consumer opinions posted online
Requested email updates
Ads in newspapers
Ads on TV
Ads on radio
Ads in magazines
Branded Web sites
Search engine ads
Web banner ads
Ads on mobile phones
0%
20%
40%
SOURCE: Forrester Research, April 2006
60%
80% 100%
Demographics of Social Computing Users