Oil and Gas Companies Must Adapt Their Messaging for COVID and Climate Change
The COVID-19 pandemic has walloped almost every industry across the globe, irrespective of size, product, service, social conscience or country of origin.
That’s especially true of oil and gas, whose companies have seen sales plummet and revenue drop since the virus hit. Many have been forced to lay off or furlough big chunks of their workforce. Nearly all have slashed capital spending.
All of this has transpired against the backdrop of an industry already under siege for its uneven response to the existential threat that climate change poses to the global environment — and to the industry’s future.
“When countries went into lockdown to try to stem the pandemic,” Renee Cho of Columbia University’s Earth Institute wrote this fall, “air travel was halted, stores and restaurants shut down and people stopped driving to work and stayed home. Global electricity demand fell by 20%.”
Even before COVID-19 paralyzed the world, demand for oil and gas had begun to wane, essentially at the same time criticism intensified of the industry’s role in climate change. If Cho and other analysts are correct, it will be close to a year — perhaps longer — before oil and gas sales return to anything approaching pre-pandemic numbers.
Then, once COVID-19 ebbs, the industry must engage in an honest reckoning with the impact of climate change. It’s a tall task.
Given these exigencies, what should oil and gas companies be doing from a communications standpoint to assuage the fears of consumers, business partners, shareholders, opinion leaders and a supply chain that runs as deep and wide as any industry’s?
The answer is “a whole lot.” In my view, most of them need to redouble their efforts and sharpen their strategy and messaging, with an eye toward their long-range goal of strengthening their efforts on climate change.
For more than four decades as a crisis communications strategist, I’ve preached two imperatives: “crisis abhors a vacuum” and “never waste a good crisis.”
In other words, I believe that individuals and institutions caught in a crossfire have little choice but to embrace transparency, assert leadership, accept responsibility if mistakes were made, and ultimately protect the brand by seizing the initiative and seeking to define the terms of the debate moving forward. In the case of oil and gas, that means shaping the discussion over their role in mitigating climate change.
Certain members of the oil and gas industry appear to have adopted these mantras. One of them is BP’s executive vice president of Communications and Advocacy, Geoff Morrell. He recently addressed the importance of aggressive COVID-19 outreach in a PR Week podcast.
“In any crisis, communications take on a greater sense of importance,” Morell argues. “It’s the lack of information — a void or vacuum — that causes more anxiety and fear.”
Morrell and BP decided to fill in the void by tapping their new CEO, Bernard Looney, who had just gotten the job in February 2020, the cusp of the COVID-19 crisis. Looney was tasked with rebuilding a BP brand still tarnished by the 2010 Gulf oil spill. When BP adopted its CEO-centric strategy, Morell said, it was “always about [enabling] our people internally and externally to hear and see him speaking.” And leading by example.
There’s no easy way out for oil and gas companies to emerge from the pandemic and position themselves on climate change — it demands hard work, smart research and resolute CEO leadership.
Showcasing Looney’s leadership has helped employees understand why BP has suspended promotions and curtailed bonuses and other benefits while donating substantial sums to such philanthropies as the World Health Organization’s COVID-19 Solidarity Response Fund and Mind in the U.K. Positioning the CEO also helped BP explain why it chose to continue paying shareholder dividends amid the pandemic while imposing significant cuts elsewhere.
To be sure, BP has taken lumps for that decision; any company would. But other companies are facing much harsher public recrimination for similar moves.
So, what tenets should guide the strategic communications of oil and gas companies in the age of COVID-19 and climate change?
Level With People
Sugarcoating the depth of the industry’s twin dilemmas will only cause more credibility problems. Be up front: Tell your key audiences that things will likely get worse before they get better.
Have the CEO do virtual Q&A sessions — and encourage tough questions. Consider issuing a path-ahead white paper that clearly outlines the company’s game plan to survive the pandemic, become corporate leaders on climate change, responsibly extract and distribute energy reserves, go above and beyond in adhering to sustainability standards, and return to profitability.
You should be repeatedly reaching out to key constituents as these crises wear on. Periodic communications aren’t going to cut it. For every external CEO interview with trade and mainstream media or industry analysts, do a half-dozen initiatives aimed at internal audiences. Volunteer that the COVID-19 crisis has strengthened your resolve to deal with climate change. Reaffirm your company’s devotion to transparency and environmental stewardship through third parties and NGOs.
Don’t Be Reticent in Shaping the Climate Change Debate
It may well be in the strategic best interest of the industry and its allies, as noted by Samantha Gross, a fellow and director of the Energy Security and Climate Initiative at Brookings, to argue that cutting back domestic oil and gas production — as advocated by many of the industry’s detractors — without an equally ambitious focus on demand could lead to increased U.S. imports, rather than a reduction in consumption.
Oil and gas companies cannot cede the debate to its critics, nor can they pretend that pushing the status quo will be adequate.
Use Trusted Mediums
You should be tapping the online platforms that employees and stakeholders have come to trust during the pandemic. The CEO needs to be a constant presence on those platforms, buoying morale, reinforcing positive messages and dispelling myths.
Investors Require Special Attention
Before the pandemic hit, the investment community had been tough on oil and gas, dissatisfied with the industry’s skittish growth and disappointed with its sluggish response to the ravages of climate change. With that in mind, companies need to recognize that investors are likely to be skeptical about the industry’s capacity to recover from these crises. Tackle the skepticism head-on, with well-documented assertions about growth projections and sustainability, buttressed by independent third parties.
A Plan for Pre-Pandemic Operability
COVID-19 is unprecedented, of course, but the industry has dealt with health crises before, on a much smaller scale. In the wake of H1N1 and Ebola, for instance, companies put together contingency plans to address and mitigate various scenarios. While working hard behind the scenes, it is important to keep relevant stakeholders apprised of the progress that’s being made.
Don’t Abandon CSR — Continue Supporting Worthy Causes
A pandemic in today’s world with the demand for community action is no time to be reneging on corporate social responsibility. When done thoughtfully, CSR can address investors’ concerns regarding the company’s societal impact; it can boost employee morale; and, it can enhance the brand’s reputation.
Keep Conducting Qualitative and Quantitative Research
Don’t guess about consumer and stakeholder COVID-19 and climate change apprehensions, know. That means focus grouping your messages and conducting regular surveys. It also means establishing a strategic optimization campaign so that your messages — and your third parties’ outreach and videos — are at the top of Google and other search engines.
There’s no silver bullet, no easy way out for companies to emerge from the pandemic and position themselves on climate change. It demands hard work, smart research and resolute CEO leadership.