ESG as a Differentiating Factor, with Equinor. Excerpt from our CCO Guide

This is an excerpt from our CCO Guide on Stakeholder Capitalism and ESG, available here, a study guide to help chief communication officers (CCOs) and their teams move up the Progression Path on Advancing Societal Value that was first laid out in the 2019 Page report, The CCO as Pacesetter.

Equinor is a partly state-owned Norwegian oil and gas company named Statoil until 2018.  From its founding in 1972, it has been at the forefront of its industry in environmental profile, social responsibility, climate footprint and human rights.  

From 2010 onwards climate change became more prominent on any oil and gas producing company’s agenda. As the impact of global warming became more visible, the legitimacy of the oil industry came under pressure. The world needed to act, and to act fast. The effect of greenhouse gas emissions from the use of hydrocarbons threatened not only the social license to operate, but future business in a world heading toward a low-carbon future.

Rather than seeing this as only a big challenge, Statoil CEO Eldar Sætre chose to focus on the opportunities it could present. In 2015 Sætre initiated a deep strategy review and engaged the corporate communications team to define a new strategic position and narrative to support the change process. But more important, he sought to make it a differentiating factor based on his belief that business has a responsibility to help decarbonize the world.

The company decided to redefine itself from being a focused oil and gas to a broad energy company. Renewable energy production and low carbon solutions for oil and gas were to play an increasingly bigger role. A new strategic narrative was developed, built around six words signaling to both the organization and stakeholders where the company was heading: “Always Safe, High Value, Low Carbon”.

The new strategic direction was largely embraced by stakeholders. It reconfirmed the company’s position as an industrial leader when it came to high social standards and to operate in line with its purpose “to turn natural resources into energy for people and progress for society”.

But the real commitment was questioned. Data showed it was still perceived as an oil and gas company. The new strategic direction was not reflected in the brand value. The company saw that if future aspirations were better reflected in its perception, it would be a more attractive employer, its ability to influence framework conditions would increase and ultimately the likelihood of realizing its strategy would be higher.

To accelerate the process, then CCO Reidar Gjærum initiated a discussion with the CEO about changing the name of the company. Excluding “oil” from the existing name was an obvious opportunity. But to replace Statoil, the highest valued brand in the country, also included risk. A new name had to clearly signal where the company was heading, create pride in the organization and get support from all stakeholders – including its owners.

The company decided to rename itself Equinor. “Equi” is derived from equilibrium and equality – clearly signaling its commitment to support progress for society. And “nor” refers to its Norwegian heritage, recognized across the world for its values and responsible approach to nature.

Within a year after the change to Equinor, brand value was higher than ever, support from the organization stronger and gradually the company is seen more as a part of the climate solution than being only associated with the problem.

In 2021 Equinor is accelerating its efforts to be a leading company in the energy transition. By 2030, more than 50% of total investments will be in renewables and low carbon solutions When becoming CEO in November 2020, Anders Opedal announced that Equinor has an ambition to be Net Zero by 2050, including scope 3 emissions – in line with the Paris Agreement.