COP26 in Glasgow this November will see the eyes of the world focus on the UK. The UK’s green ambitions – and action – are under significant scrutiny. The regular drumbeat of announcements from across government aimed at supporting the green recovery and the UK’s transition to Net Zero are testament to this.
But it is not just government aiming to set their own narrative ahead of COP26. Businesses – particularly those in the energy sector – also have a need to communicate around the summit and to tell their own story on the contribution they are making to achieve the UK’s legal targets by 2050. Brands need to show consumers and other stakeholders that they are doing the right thing. They need to shape the policy frameworks that government is developing that will achieve these ambitions. They need to explain to investors, employees, and customers what the transition means to them and how they are adapting their businesses to reflect this. While the transition to Net Zero presents many opportunities, it also isn’t without its challenges.
All of this means that for businesses in the energy sector, communicating about Net Zero is not as simple as just sharing good news and showing you are ‘green’. Different audiences all have different needs and priorities. They need to hear nuanced messages in different ways. Understanding these complexities and responding to them through simple communications is not easy.
Here we share our thoughts on how best to engage with these different audiences:
To date, the transition to Net Zero has been largely theoretical for most people. It has focused on how energy is generated rather than how it is used. Where it has been about usage – for example transport decarbonisation – change is still at a relatively early stage and it has had limited impact on people’s lives. This will inevitably change. Net Zero will become a lot more intrusive in people’s lives very quickly – the decarbonisation of heat is just one example of where business must take the lead in explaining to their customers what is happening, why it is happening, and how it will impact peoples’ lives.
Heat decarbonisation could see the mass installation of hydrogen boilers and/or electric heat pumps with old boilers and hobs eventually replaced with lower carbon alternatives. Consumers will be looking to their energy suppliers and other well-known brands – manufacturers and network operators – to guide them through this period of change and uncertainty. They will be looking to these businesses for clarity on what heat decarbonisation is likely to mean for them and their families, what they need to do, when, and how they will be supported.
Consumers risk losing trust in suppliers and others in the sector if they feel they’re not getting the advice they need. The challenge is that not all of these answers are known yet and there is disagreement within the sector about the best pathway to take. In the interim, businesses in the energy sectors have a role to play in explaining the different options and showing that they are actively championing the needs of consumers.
The key milestones and direction of travel on the transition to Net Zero will be set by government. While business has a critical chance through innovation to shape the approach of the UK to decarbonisation, it will ultimately have to align with the policy and regulatory framework.
Communication to policymakers needs to balance two dynamics: what businesses need – whether that be a supportive tax or regulatory framework – and what they can offer. The offer could be innovation that makes it easier for the UK to meet its Net Zero objectives, or it could be jobs. But critically it needs to go beyond narrow business interests and fit into the government’s political agenda: supporting ‘levelling up’ and promoting Global Britain, for example through exports.
Crucially your approach needs to be about talking to more than just BEIS. The shift of industrial strategy policy from BEIS to the Treasury enhances their existing interest in how innovation supports regional investment, and the policy frameworks required to achieve this. But other departments beyond the Treasury can also play a key role as champions for a supportive policy environment and will be keen to hear what you have to say, be that the Department for International Trade on exports or MHCLG on ‘levelling up’ and investing in communities.
Net Zero has dovetailed with the government’s ‘levelling up’ agenda. There is a drive to root the transition to a low carbon economy in particular places. The focus on Teesside and the Humber reflects the Conservative Party’s electoral priorities as well as the contribution these areas can make to decarbonisation – in both cases decarbonising industry and as hubs for offshore wind development.
Businesses need to reflect this in their communication. But just suggesting that green innovation will lead to investment in these regions is not enough. It needs to be specific: what will this mean in practice for people living in these places? How many new or higher skilled jobs will be created? How will this investment support local young people – through training – to access high-skilled, long term jobs? How will it upskill existing employees or help them transition from jobs in high carbon sectors to new ‘green’ industries? How will this improve the local communities, high streets and living conditions of people there? People like Ben Houchen, the Metro Mayor for Tees Valley, are important advocates to have in making this case, but ultimately you need to be persuading local people and not just their elected representatives.
The transition to Net Zero means significant opportunities, but it also means change for some parts of the energy sector. This is likely to lead to uncertainty for those working in these sectors, particularly in oil and gas. By explaining to their employees what the transition is likely to mean for them and how they plan to help them benefit from these opportunities, employers can show empathy and demonstrate they genuinely understand people’s concerns. This may require reskilling or a focus on training. Employers can tell a story to their staff about how the transition will bring value to them not just the planet or the UK economy more broadly. Importantly, employees aren’t just workers but they are also consumers, part of local communities, and possibly even shareholders in the businesses they work for. Your employees can be your greatest advocates.
Shareholders and investors
The rise of the ESG agenda highlights that investors recognise the importance of Net Zero. However, the policy and regulatory developments to drive progress towards these targets will still likely to lead to questions for them. Much of the policy detail in certain areas of energy decarbonisation is still to be defined; in some areas there are still more questions than answers. Businesses in the energy sector are having to manage this ambiguity and are seeking to provide clarity to investors as to what the likely pathways to Net Zero are.
In heat decarbonisation for example, government has been careful to date to be seen not to pick technology winners. This could leave shareholders unclear of the implications and therefore at risk of making the wrong choices. It makes it even more important for businesses to paint a picture of the opportunities and risks, and to interpret what policymakers’ choices will mean for them. It’s a circular process: your conversations with investors provide insights to share with policymakers on how best to unlock private capital and investment through a well-designed policy framework.