2020 was always set to be a complicated year to navigate for brand leaders in the energy category. Five years on from the Paris Climate Agreement, the COP 26 in November was due to up the ante and push the transition of energy and transport systems onwards with renewed pace towards a low carbon future. A growing list of countries and markets around the world, including the UK and EU, had begun the year by setting out targets and ambitions to achieving net zero emissions in the coming decades. Many companies, particularly the large European energy companies including Repsol, Equinor, BP, Total and Shell all responded with their own plans to transition their businesses and reduce the climate risk hanging over their portfolios.

For brand leaders, this meant transitioning their brand to keep pace with new corporate strategy. It meant communicating complex issues and balancing the needs and interests of a range of stakeholders. It meant launching new low carbon propositions, all while navigating the critiques of NGOs about pace of change – particularly whether the focus of capital expenditure had truly shifted to match the emphasis of new communications.

This, of course, was the focus until March 2020. Then COVID-19 became a global pandemic and decimated global demand for energy and a break down in the OPEC+ partnership between Russia and Saudi Arabia led to oil markets being flooded with oversupply. The impact on price was inevitable and the price shock has led energy companies to quickly cut back on capital expenditure, re-capitalise and hunker down. Operating expenses have rightly been added to the cost-cutting exercise and the complexity facing brand, marketing and communications teams have been compounded by diminished resources. So in the short term, the challenge has become one of refocussing resources to cover the short term necessities while not leaving your brand open to attack for changing longer-term priorities on climate change.

Total, BP, Shell, Eni have subsequently undertaken a public game of one-upmanship, as they polish their credentials on climate change and emphasise the point that they will not lose sight of the bigger existential threat looming on the horizon. After all, a corporate and brand strategy dictated by oil price is foolishly short term in a business where investments are traditionally made over a 20-40 year horizon.

In the broader energy market resilience has become the new watchword. Electricity demand has dropped as economies have been locked down and the electricity grids of some developed markets have had to deal with near record lows of demand. With the IEA forecasting a 6% drop in energy demand translating to an 8% drop in carbon dioxide emissions and the Washington Post reporting a peak drop in daily emissions of 17 per cent in early April, the positive environmental impact has been significant. Perhaps the most widely observed impact of lockdowns has been the clearing of air pollution from cities around the world and the contrasting smog-laden pictures from only weeks before. This has even been observed from orbiting satellites and the impact of these images may help to create lasting change.

We stand now at a crossroads and it will be changes in demand that determine the direction of emissions in the longer term and the fortunes of the energy companies. Will the renewed sense of agency that people feel from surviving a global pandemic lead to wider changes in consumption or will we slip back into our old consumption patterns? Economic wellbeing will be a key factor. Many will lose their jobs and incomes in the next few months if they haven’t already and the price of necessities will make values-based choices a luxury that many won’t be able to afford. Although as BP Chief Executive Bernard Looney said in a recent interview, “We are all living differently and there is a real possibility that some of this will stick.”

Another key factor will be the various government stimulus packages. For a long time, the sort of transformation that the planet has needed has called for a plan of almost unprecedented proportions. The shift of capital created if those stimulus plans target low carbon technologies and infrastructure could create significant and lasting changes to demand.

For brands like BP and Shell that see a need to harness changing behaviours to transition their businesses, this change becomes both risk and opportunity. Judging the pace of change will be critical. Even after the recently rejigged spending plans, investments in renewables and low-carbon technologies for the top five European oil companies represent no more than 15% of total investments, and climate advocates are pressing the companies to do more. And the need to do more was highlighted by Energy Secretary Dan Brouillette in a recent interview, even as he pointed out that the goals of the Paris Climate Agreement are looking increasingly out of reach, “We’ve practically shut down the world economy and we still haven’t met the goals that were set.”

A massive shift in behaviour is needed and, ultimately for brand leaders, there is no better time to engage audiences who have a renewed sense of agency inspired by the recent life-changing events of COVID-19. The communications challenge will be whether the big oil brands can transform effectively into big energy and lifestyle brands. Ultimately, these brands will have to force that change at a pace that they can handle and that observers can accept. They will also have to watch carefully for tipping points, otherwise changes will be happening to their brands and markets in a way that investors used to stable returns will not welcome.