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September 22, 2022 //  //       //  Opinion

The Global Energy Crisis Threatens a Perfect Storm for Reputation – How Can Your Organization Prepare to Weather It?

Every corner of the world is currently feeling the effects of global energy turbulence triggered by geopolitics and climate change. In Europe, the severance of ties with the Kremlin has led Russia to close its main natural-gas pipeline to the region, subsequently causing unprecedented price inflation and energy shortages for tens of millions of Europeans. In California, recent record-shattering heat and destructive wildfires nearly brought the largest power grid in the United States to the brink as officials pleaded with consumers to conserve power and limit air conditioning and electricity use. With the rationing of hot water already underway in Germany, and California officials advising electric vehicle owners to limit charging, the energy crisis has become a global issue impacting consumers everywhere.

Like most crises, this moment will serve as a critical reputational proving ground for companies as they fight a two-front war of handling disruptions to their own business while also managing customer relations in the face of soaring costs and disruption to daily life. So, how can organizations brace for the coming reputational storm?  

Assess Your Own Risk 

First and foremost, companies must look inward to determine their own risk of energy-related issues. For example, utility companies should ensure they have crisis communications plans for unplanned or strategically planned blackouts, while brick-and-mortar retail stores and restaurants should consider how they plan to handle directives by authorities to limit use.  

When assessing your risks associated with an energy crisis, consider asking these key questions that help determine your level of preparedness:  

  • How could the organization be impacted by an adverse energy event like a blackout or energy shortage?  
  • Are there existing plans in place for responding to adverse energy/weather-related events that outline response procedures and best practices? 
  • Who are the individuals and teams with decision-making authority in the event of an energy-related crisis?  

Consider Your Universe of Stakeholders  

Secondly, business leaders must identify their core stakeholders and make a thorough assessment of how the energy crisis impacts each stakeholder group. Consider customers or employees who may be in regions heavily impacted by blackouts or skyrocketing energy costs and determine potential ways you can reduce (or at least, not contribute to) the stress they feel. Determine communications priorities and goals for each audience and be sure to incorporate them into all the company’s communications.  

Note – your reputation, no matter how well-established, is on the line in times of crisis. If you are a company that champions CSR, make sure you live up to your commitments to community, like Anheuser-Busch and others have done through partnerships with the American Red Cross. The brewer recently donated more than 50,000 cans of emergency drinking water to aid relief efforts for California wildfires. 

If you are faced with difficult decisions, such as strategically implementing power outages to prevent widespread damage to the electric grid, plan to compensate consumers fairly, if possible. Avoid the example of AEP Ohio, which recently received widespread public backlash after initially failing to offer direct reimbursement for customers impacted by a deliberate outage that was planned with little advance notice.  

Implement a Strategic Risk Preparedness Plan 

After assessing your own risk profile and mapping your universe of stakeholders, it is time to create a strategic risk preparedness plan. An effective plan will designate a crisis communications team tasked with leading communications around the crisis/issue and outline all the internal subject matter experts responsible for mitigating its impacts. It will also guide the company through the entire lifecycle of a crisis, from initial incident discovery, to threat assessment, response plan implementation and the after-action report once it is resolved. Lastly, it will include goals, best practices and template key messages for communicating with each stakeholder group, which will serve as a starting point for all company communications on the issue.  

Reputation is hard to build and easy to lose. And during times of great consumer stress, like we now see with the global energy crisis, the stakes are raised even higher. With Russia showing no signs of easing tensions with the West and extreme weather events becoming more frequent, threats to the energy supply are likely to continue into 2023 and beyond. By taking the steps above, you will help ensure your organization is prepared to meet the challenges of the ongoing global energy crisis and effectively communicate with your diverse stakeholders to preserve reputation.   

If you’d like to learn more about how our global reputation risk and public affairs team can support your organization in responding to adverse energy events or managing stakeholder concerns, get in touch with Barbara Laidlaw at barbara@allisonpr.com.   

Barbara Laidlaw brings 25 years of experience developing and running programs that help companies prepare, protect and defend their brand reputations through global and national events, recalls, litigation, data breaches, regulatory issues and labor disputes. 

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