BUILDING TRUST IN THE ENERGY INDUSTRY

@RISHIWISE1 #EDELTRUST STAVANGER, MARCH 24, 2015

EDELMAN’S 15TH ANNUAL TRUST BAROMETER METHODOLOGY Online Survey in 27 Countries • •

•

33,000 respondents 7 years in 20+ markets 10 years in 10+ markets

Informed Public • • • •

General Online Population • • •

2

1,000 respondents per country surveyed Ages 18+ 4 years in 25+ markets

•

•

500 respondents in U.S. and China, and 200 in other countries Ages 25-64 College-educated In top 25% of household income per age group in each country Report significant media consumption and engagement in business news and public policy 15 years of data

THE STATE OF TRUST

4

TRUST IN RETROSPECT

2015

TRUST IS ESSENTIAL TO INNOVATION

2014

BUSINESS TO LEAD THE DEBATE FOR CHANGE

2013

CRISIS OF LEADERSHIP

2012

FALL OF GOVERNMENT

2011

RISE OF AUTHORITY FIGURES

2010

TRUST IS NOW AN ESSENTIAL LINE OF BUSINESS

2009

BUSINESS MUST PARTNER WITH GOVERNMENT TO REGAIN TRUST

2008

YOUNG INFLUENCERS HAVE MORE TRUST IN BUSINESS

2007

BUSINESS MORE TRUSTED THAN GOVERNMENT AND MEDIA

2006

“A PERSON LIKE ME” EMERGES AS CREDIBLE SPOKESPERSON

2005

TRUST SHIFTS FROM “AUTHORITIES” TO PEERS

2004

U.S. COMPANIES IN EUROPE SUFFER TRUST DISCOUNT

2003

EARNED MEDIA MORE CREDIBLE THAN ADVERTISING

2002

FALL OF THE CELEBRITY CEO

2001

RISING INFLUENCE OF NGOS

THE EVAPORATION OF TRUST: NGOS, BUSINESS, MEDIA ALL DECLINE

Informed Public

TRUST IN THE FOUR INSTITUTIONS OF GOVERNMENT, BUSINESS, MEDIA AND NGOS, 2014 VS. 2015

66%

63%

#1

NGOS 2014

51%

#3

MEDIA 2014

57%

#2 2015

53%

4

59%

2015

2014

45%

2014

BUSINESS 2015

#4

48%

GOVERNMENT 2015

Q11-14. [TRACKING] Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a nine-point scale, where one means that you “do not trust them at all” and nine means that you “trust them a great deal.” (Top 4 Box, Trust) Informed Publics in 27-country global total.

…AND THE DEBATE IS INTENSIFYING FOUR KEY FACTORS AFFECT TRUST IN BUSINESS

INDUSTRY SECTOR

ENTERPRISE TYPE

BUSINESS COUNTRY OF ORIGIN

LEADERSHIP

All are showing similar patterns of a post-recovery increase in trust, followed by new declines in the last 12 – 18 months

5

DISTRUSTERS

NEUTRAL

TRUST IN THE ENERGY SECTOR, INFORMED PUBLIC VS. GENERAL ONLINE POPULATION

Informed Public

TRUSTERS

ENERGY INDUSTRY MORE TRUSTED BY INFORMED PUBLIC IN MOST COUNTRIES

2015

7

GLOBAL India UAE China Indonesia Singapore Malaysia Brazil Russia Hong Kong Mexico S. Korea Italy U.S. France Netherlands S. Africa Canada Japan Australia Poland Turkey Spain Ireland Sweden Argentina U.K. Germany

2015 60

GLOBAL

55

86 85 84 80 75 73 69 68 66 65 63 60 59 57 56 50 49 49 49 48 47 46 46 44 42 38 37

India UAE Indonesia China Singapore Malaysia Brazil Mexico Hong Kong U.S. S. Korea Italy Russia France Canada Netherlands S. Africa Poland Argentina Ireland Japan Turkey Australia Germany Sweden U.K. Spain

80 75 75 74 69 69 65 64 62 59 58 56 56 54 53 51 51 48 47 47 44 43 43 40 39 37 34

General Population

Q43-60. [TRACKING] Please indicate how much you trust businesses in each of the following industries to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) Informed Publics, 27-country global total and General Population, 27-country global total.

General Online Population has equal or greater Trust in • Mexico (-1) • U.S. • Canada (+4) • S. Africa (+1) • Poland • Argentina (+5) • Ireland (+1) • U.K. (-1)

INDUSTRY SECTORS: TECHNOLOGY-BASED INDUSTRIES DECLINE

Informed Public

TRUST IN INDUSTRIES 2014 VS 2015, DECLINES COMPARED TO 2014

2014

2015

More Trust 80 78

8

77 75

Less Trust 72 71

% Trust *% of countries in which trust decreased

66 67

67 67

66 66

63 63

64 63

61 61

61 60

61 60

57 57

53 54

54 53

Q43-60. [TRACKING] Please indicate how much you trust businesses in each of the following industries to do what is right. Again please use the same nine-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal.” (Top 4 Box, Trust) Informed Publics, 27-country global total.

52 51

50%

TRUST IN ENERGY: DECLINING IN 60% OF COUNTRIES SURVEYED

General Population

TRUST IN ENERGY INDUSTRY, 2014 VS 2015

2014 Increased Trust in 11 Countries

Lower/Equal Trust in 16 Countries

% Trust; emphasis on changes of 5 points or more

8180 7675

7475

78 74 6969

5655

59 56

56 56 54 55

71 69

67 65

69 68 64 62 62 58

54 48

4748

47 44

43 41

40 39 36 36

2015

55 5453 5251 5351 50 47 48 44 43

37

9

+6

41 34

31

+6

50%

-5

-6

-5

-8

Q43-60. [TRACKING] Please indicate how much you trust businesses in each of the following industries to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) General Population, 27-country global total.

-7

-7

INDUSTRY SUB-SECTORS: NUCLEAR IS LEAST TRUSTED

General Population

TRUST IN VARIOUS INDUSTRY SUB-SECTORS, 2014 VS. 2015

2014

2015

70% 68% 57% 57%

54%

50% 49%

50%

50%

49% 41%

Renewables/ Cleantech*

Natural Gas

Utilities

Oil

Mining

Pipelines

Nuclear

Q61C-65C. [TRACKING] Now thinking about specific sectors within the energy industry, please indicate how much you trust businesses in each of the following sectors to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. General Population, 27-country global total.

10

*2014: “Renewables (wind, solar, biofuels, geothermal, etc.),” 2015: “Cleantech (electric vehicles, smart grid, wind and solar power)”

TRUST IN CLEANTECH (RENEWABLES IN 2014): SHARP DECLINES IN SOME KEY MARKETS

General Population

TRUST IN CLEANTECH/RENEWABLES, 2014 VS 2015

2014

% Trust

Increased Trust in 11 Countries 82 70 68

81 79 7978 7878 73 68

70 66

69 59

50%

Lower/Equal Trust in 16 Countries

85 80 77 7678

7373 73 71 6566

6364

62 58 5859

2015

75 71

77 68

71 6665

68 64 64

77

74 70

63

67 65 62 62 61

5556

59

-18

11

Q61C-67C. [TRACKING] Now thinking about specific sectors within the energy industry, please indicate how much you trust businesses in each of the following sectors to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) General Population, 27-country global total.

61 56

TRUST IN NUCLEAR: DISTRUSTED BY 80% OF COUNTRIES SURVEYED

General Population

TRUST IN NUCLEAR, 2015

2015 More Trust

Less Trust

% Trust

68 68

65 54 53

41

50%

46 44 44 43 42 42 42 41 41 41 39 39 38 33 32 31 29

11

26 25 24 23 21

Q61C-67C. [TRACKING] Now thinking about specific sectors within the energy industry, please indicate how much you trust businesses in each of the following sectors to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) General Population, 27-country global total.

TRUST IN OIL: DECLINE IN 60% OF COUNTRIES

General Population

TRUST IN OIL, 2014 VS 2015

2014 Increased Trust in 11 Countries

Lower/Equal Trust in 16 Countries

% Trust

81 82 79 78

71 67

7574

72 68 68 66 64 63 63

60 5049

53 47 41

44 36

44 37

41 39

39 3839 36

61

5958 52 52 50 45 46 42 4341

35 33

2015

34 33 30 29

50% 40 39 38 36 3029 30 27

+6

13

Q61C-67C. [TRACKING] Now thinking about specific sectors within the energy industry, please indicate how much you trust businesses in each of the following sectors to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) General Population, 27-country global total.

TRUST IN NATURAL GAS: SHARP DECLINES IN SOME KEY MARKETS

General Population

TRUST IN NATURAL GAS, 2014 VS 2015

2014

% Trust

Increased Trust in 11 Countries

Lower/Equal Trust in 16 Countries

8283

8181 80 77 73

71 66

5757

69 67 62 60 57 57

66

70 70 67 65 65 64 65 62 58

54 48

5253

52 50

49 43

+6

14

2015

49 42

52 47 45

43 40

58 50 5049 51 48

51 4545

4342

50%

41 40 37

+7

Q61C-67C. [TRACKING] Now thinking about specific sectors within the energy industry, please indicate how much you trust businesses in each of the following sectors to do what is right. Again, please use the same 9-point scale where one means that you “do not trust them at all” and nine means that you “trust them a great deal”. (Top 4 Box, Trust) General Population, 27-country global total.

TRUST AND INNOVATION

TRUST IN BUSINESS INNOVATION: PACE IS TOO FAST BY A 2-TO-1 MARGIN

Informed Public

THE PACE OF DEVELOPMENT AND CHANGE IN BUSINESS AND INDUSTRY TODAY IS…

28% Too Slow

19

19% Just Right

51% Too Fast

Q349-351. Below are a number of statements. For each, please think about the pace of development and change in business and industry today and select the response that most accurately represents your opinion. (Not Enough, Too Much) Informed Publics, 27-country global total.

INNOVATIONS PERCEIVED AS DRIVEN BY TECHNOLOGY, BUSINESS TARGETS AND GREED/MONEY

Informed Public

DRIVERS OF CHANGE IN BUSINESS AND INDUSTRY TODAY ARE PERCEIVED TO BE:

Technology

70%

Business Growth Targets

66%

Greed/Money

54%

Personal Ambition

35%

Improve People's Lives

Make the World a Better Place

17

30%

24%

Q353. From the list below, what do you believe are the top three drivers of change in business and industry today? Informed Publics, 27-country global total.

BUSINESS INNOVATION: HYDRAULIC FRACTURING IS SIGNIFICANTLY DISTRUSTED TRUST IN RECENT DEVELOPMENTS IN BUSINESS AND INDUSTRY, INFORMED PUBLIC VS. GENERAL ONLINE POPULATION

69%

General Population

61%

59% 49%

55% 44%

50%

47% 39% 32% 25%

Electronic and Electronic Cloud Computing and Electronic and and Cloud Payments Personal Personal Health Health Mobile Payments Trackers Trackers

18

Informed Public

Hydraulic Fracturing

Genetically Modified Foods

Q355-359. Below are a number of recent developments in business and industry. To what degree do you trust each of these recent developments? Informed Publics, 27-country global total.

HYDRAULIC FRACTURING: DISTRUSTED IN 19 OF 27 COUNTRIES SURVEYED TRUST IN HYDRAULIC FRACTURING

More Trust

Less Trust

% Trust in Hydraulic Fracturing

73

61

39

15

58 56

53 52 51 50

47 45 44 43

50% 39 38

35 33

30 30 29 29 28 28 26 25 23 22

Q355-359. Below are a number of recent developments in business and industry. To what degree do you trust each of these recent developments? HYDRAULIC FRACTURING [A PROCESS IN WHICH NATURAL GAS IS EXTRACTED FROM ROCK BENEATH THE EARTH'S SURFACE] General Population, 27-country global total and across 27 countries.

18

General Population

TRUST AND BUSINESS INNOVATION: HIGHER TRUST CREATES THE OPPORTUNITY FOR FASTER INNOVATION

Informed Public

RELATIONSHIP OF TRUST IN INSTITUTIONS (TRUST INDEX) AND AVERAGE TRUST IN RECENT BUSINESS DEVELOPMENTS 95

Data from Table 574 UAE

85

TRUST IN INSTITUTIONS (TRUST INDEX)

IND INDO CHI

75

65

SING

NETH GLOBAL

55

CAN

AUS FRA

GER SWE

45

35

25 25%

JAP

35%

RUS TUR

MEX US

S.AF HK U.K.

SPA

BRA MAL

ITA S.KO

ARG

POL

IRE

45%

55%

65%

75%

TRUST IN RECENT BUSINESS INNOVATIONS (AVERAGE)

20

Q355-359. Below are a number of recent developments in business and industry. To what degree do you trust each of these recent developments? Informed Publics, 27-country global total. Q11-14. Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a nine-point scale, where one means that you do not trust them at all and nine means that you trust them a great deal. Informed Publics, 27-country global total.

85%

TRUST AND REGULATION

BUSINESS INNOVATION: NOT ENOUGH GOVERNMENT REGULATION

51%

GOVERNMENT REGULATION OF BUSINESS AND ACROSS INDUSTRY SECTORS IS PERCEIVED TO BE:

NOT ENOUGH REGULATION

Informed Public

2014 TRUST BAROMETER:

say the most important role for government in business is to protect consumers and regulate business

TOO MUCH REGULATION

54%

54%

53%

52%

46%

40%

24% 15%

Business

23

Financial Services Industry

16%

Health Industry

20%

Technology Industry

17%

Energy Industry

14%

Food and Beverage Industry

Q148. [TRACKING] When it comes to government regulation of business, do you think that your government regulates business too much, not enough or the right amount? (Not Enough, Too much) Informed Publics, 27-country global total. Q262/Q263/Q264/Q381/Q382. When it comes to government regulation of the [financial services industry / energy industry / food and beverage industry / health industry / technology industry], do you think that your government regulates it too much, not enough or the right amount? (Not Enough, Too much) Informed Publics, 27-country global total.

EVEN WITH LOW GOVERNMENT TRUST, MAJORITY AGREE, ENERGY INDUSTRY SHOULD BE MORE REGULATED

General Population

GOVERNMENT REGULATION OF THE ENERGY INDUSTRY: TOO MUCH, NOT ENOUGH, OR DON’T KNOW Not Enough Regulation

More Trust

Too Much Regulation

Don’t Know

More Agreement : Not Enough Regulation % who agree 8 7

6

11

6

9

15

70

69

52

2 13

5 14

20

11 14

10 10

13 66

65

11 62

58

7

58

17

10

6 58

8

57

57

12 11 56

15 13 55

12 4 13 54

14

52

10

27

14

52

12 8

16

19 14

12 16

20

16

10 9

29

22

6 51

50

49

49

48

21

16 45

43

23

18

12 10

41 36

32

12 20

32 25

23

Q263. When it comes to government regulation of the energy industry, do you think that your government regulates it too much, not enough or the right amount? General Population, 27-country global total and across 27 countries .

50%

ENERGY REGULATIONS: INDUSTRY HAS THE LICENSE TO ENGAGE PERCENT OF RESPONDENTS WHO AGREE

We Need More Regulation—But Don’t Trust Policy Makers Alone

52% 43%

Not enough government regulation of the energy industry Trust policy makers to implement appropriate regulations on the energy industry

The Energy Industry Needs To Engage

69%

69%

24

When policymakers are developing new regulations, they should consult with multiple stakeholders (i.e. NGOs, academics, the affected businesses/industries, etc.)

The energy industry should be a more active participant in the broader debate over energy policy

Q263. When it comes to government regulation of the energy industry, do you think that your government regulates it too much, not enough or the right amount? General Population, 27-country global total and across 27 countries. Q265-386. [TRACKING] [SPLIT SAMPLE] Please indicate how much you agree or disagree with the following statements? General Population, 27-country global total and across 27 countries. – “I trust policymakers to develop and implement appropriate regulations on the energy industry.” Q265-386. [TRACKING] [SPLIT SAMPLE] Please indicate how much you agree or disagree with the following statements? General Population, 27-country global total and across 27 countries. – “When policymakers are developing new regulations on businesses and industries, they should consult with multiple stakeholders (i.e. NGOs, academics, the affected businesses/industries, etc.) before making final decisions.” Q265-386. [TRACKING] [SPLIT SAMPLE] Please indicate how much you agree or disagree with the following statements? General Population, 27-country global total and across 27 countries. – “The energy industry should be a more active participant in the broader debate over [INSERT COUNTRY] energy policy.”

General Population

BUILDING TRUST

16 KEY ATTRIBUTES TO BUILDING TRUST

Edelman Trust Barometer research reveals 16 specific attributes that build trust.

These can be grouped into five performance clusters listed here in rank order of importance.

INTEGRITY Has ethical business practices Takes responsible actions to address an issue or crisis Has transparent and open business practices

ENGAGEMENT Listens to customer needs and feedback Treats employees well Places customers ahead of profits Communicates frequently and honestly on the state of its business PRODUCTS & SERVICES Offers high-quality products or services Is an innovator of new products, services or ideas PURPOSE Works to protect and improve the environment Addresses society’s needs in its everyday business Creates programs that positively impact the local community Partners with NGOs, government and 3rd parties to address societal needs OPERATIONS Has highly-regarded and widely-admired top leadership Ranks on a global list of top companies Delivers consistent financial returns to investors

26

Q80-Q95. [TRACKING] How important is each of the following actions to building your trust in a company? Use a nine-point scale where one means that action is “not at all important to building your trust” and nine means it is “extremely important to building your trust” in a company. (Top 2 Box, Very/Extremely Important) Informed Public, 27-country global total.

ENERGY INDUSTRY FALLING SHORT IN KEY TRUST-BUILDING BEHAVIORS

General Population

IMPORTANCE OF BEHAVIORS IN BUILDING TRUST VS. PERCENT WHO AGREE THE ENERGY INDUSTRY IS PERFORMING WELL AGAINST THESE BEHAVIORS

Gap Importance of Behavior

vs.

Importance of Behavior in Building Trust in a Company

Energy Industry Performance

Energy Industry Performing Well Ensures quality control Protects customer data

58%

Keeps me and my family safe

58%

Makes my life easier Embraces sustainable business practices

27

80% 79% 78%

54% 51%

Supports local charities and good causes

51%

Makes me feel connected to something bigger

84%

65%

Is transparent in reporting progress on company's social responsibilities

Develops intellectual property

84%

60%

54% 48%

78%

74% 72% 67%

-24 -26 -22 -14 -24 -27 -23 -18 -19

Q335-343. How important is each of the following factors to building your TRUST in a company? Use a 9-point scale where one means that action is “not at all important to building your trust” and nine means it is “extremely important to building your trust” in a company. (Top 4 Box, Trust) General Population, 27-country global total. Q344-348. How well do you think the [INSERT SECTOR BEING RATED] industry is performing on the behaviors listed below. Use a 9-point scale where one means they are “performing extremely poorly” and nine means they are “performing extremely well”. General Population, 27-country global total and across 27 countries .

TRUST MATTERS

Informed Public

BEHAVIOR BASED ON TRUST

Distrusted Companies -63%

-58%

Trusted Companies

Refused to buy products/services

Criticized them to a friend/colleague

Shared negative opinions online

Shared positive opinions online

40%

Defended company

-18%

28

Sold shares

68%

Recommended them to a friend/colleague

Paid more for products/services

-37%

80%

Chose to buy products/services

Bought shares

28%

54% 48%

#1

most trusted content creators:

FRIENDS AND FAMILY

#1

most trusted media source:

ONLINE SEARCH ENGINES

Q371-376. Thinking back over the past 12 months, have you taken any of the following actions in relation to companies that you trust? Please answer yes or no to each action. Informed Publics, 27-country global total. Q377-380. Still thinking about the past 12 months, have you taken any of the following actions in relation to companies that you do not trust? Please answer yes or no to each action. Informed Publics, 27-country global total.

BUILDING TRUST IN THE ENERGY INDUSTRY

@RISHIWISE1 #EDELTRUST STAVANGER, MARCH 24, 2015