Does the need to manage reputation in companies play a part in bringing about change in the economic and social model prevailing up to that moment? Should the Chief Communications Officer (CCO) be the one responsible for ensuring the long-term vision in the face of companies’ short-termism, as well as for changing their relationship with the world?
Vestas is a firm that is over a century old, with mainly Danish capital and fully listed on the stock market. The firm began trading as a manufacturer of aluminium windows, but then started making farming equipment, and finally, in the 1970s –in response to the oil crisis– it began exploring wind energy as a cleaner and safer energy supply source.
This document has been prepared by Corporate Excellence – Centre for Reputation Leadership. It has cited, from among other sources, the speech by Morten Albaek, Senior Vice President for Group Marketing & Customer Insight at Vestas, delivered at 15th International Conference “Navigating the Reputation Economy” organised by Reputation Institute in New Orleans on 18, 19 and 20 May 2011.
When the wind of reputation blows in favour: Vestas and a new model of humanistic capitalism.
1. Cases
Strategy Documents
C13/2013
Public Affairs
When the wind of
reputation blows in favour:
Vestas and a new model of
humanistic capitalism
Does the need to manage reputation in companies play a part in bringing about
change in the economic and social model prevailing up to that moment? Should
the Chief Communications Officer (CCO) be the one responsible for ensuring
the long-term vision in the face of companies’ short-termism, as well as for
changing their relationship with the world?
Vestas is a firm that is over a century old, with
mainly Danish capital and fully listed on the stock
market. The firm began trading as a manufacturer
of aluminium windows, but then started making
farming equipment, and finally, in the 1970s –in
response to the oil crisis– it began exploring wind
energy as a cleaner and safer energy supply source.
The firm is undoubtedly operating in one of the
world’s cleanest sectors, but it does not simply
belong to it -it is its global leader. Wind is its raw
material, and the change in the current model of
fossil fuels –or black ones, as Vestas refers to them–
will open the door to a cleaner energy mix, in which
wind power will play a more important role. This
has prompted the firm’s tagline: Wind. It means the
World to Us.
According to Morten Albaek, Senior Vice President
for Group Marketing & Customer Insight at Vestas,
wind power is the most competitive, not in terms
of the sum of the earth’s energies that humans
know how to harness, but rather of the sum of all
renewable energies. Not only that, it is also the
quickest to install and the one that emits the least
amount of greenhouse gases; in other words, it is the
most sustainable of all of them.
Why, therefore, is it not sufficiently known by
consumers or positively viewed by people in the
way solar energy is within the field of renewables,
in terms of its contribution to the environment, or
nuclear power within the field of traditional energy,
given its contribution to the overall amount of
power supplied?
This document has been prepared by Corporate Excellence – Centre for Reputation Leadership. It has cited, from among other
sources, the speech by Morten Albaek, Senior Vice President for Group Marketing & Customer Insight at Vestas, delivered at 15th
International Conference “Navigating the Reputation Economy” organised by Reputation Institute in New Orleans on 18, 19 and
20 May 2011.
2. When the wind of
reputation blows
in favour: Vestas
and a new model of
humanistic capitalism
Empowering “citisumers”
or “consumizens”
Transparency is, perhaps, one of the main values
behind a good reputation, but in the renewable
energy sector it is a crucial factor. Transparency
ensures real information is known instantly and all
the necessary facts are made available for a proper
and more conscious decision.
This is the target Vestas set itself in 2009, according
to its Senior Vice President for Group Marketing
& Customer Insight, when it committed to the
development of an ambitious plan that involves
giving power and autonomy to those deemed to
be the new “citisumers” or “consumizens” –types
of consumers who conduct themselves in the full
awareness of being active citizens.
‘Transparency
ensures real
information is
known and all
the necessary
facts are made
available
for a proper
and more
conscious
decision’
With the help of consumers themselves, as well as of
other companies that share the same view as Vestas
on this matter, the Danish firm has launched a
large number of initiatives –both within the actual
energy sector and outside it– designed to improve
communication and increase the visibility of the
energy basically used to manufacture a product.
In 2010, a global survey was released on wind
and consumers regarding climate change, with
over 31,000 responses from 26 countries. In 2011,
during the World Economic Forum held in Davos
(Switzerland), presentation was made of the first
label for companies using wind power (WindMade)
with the catchphrase “Choose Wind. Power
Change.” and supported by the World Energy
Council, WWF, Lego, the UN Global Compact,
PwC and Bloomberg. In addition, the Global
Corporate Renewable Energy Index (CREX) was
introduced and an agreement reached to hold a
Global Wind Day.
The survey clearly reflected the concern over
climate change, with the negative consequences of
global warming for human activity and the economy
as a whole being considered serious in 84% of cases,
especially in those countries posting the highest
growth in recent years, such as China or India.
Likewise, and with regard to this serious problem, 84%
of the responses rated the responsibility of people and
of humanity as a whole as a cause for concern, with
emerging countries once again at the forefront. Yet
the issue those polled in this survey referred to the
most, and which they most approved of, involved
the positive role renewable energy sources may have
when tackling and resolving this situation.
Concerning the results of the initiative designed
to introduce a recognisable seal for those products
made thanks to wind energy –similar to the one
created in its day for ecological, organic or natural
products–, Albaek explains that Vestas championed
a technical committee charged with supervising
the creation of that standard. This committee has
managed to convince the world’s main global brands
to take part in the project and contribute their ideas
before the end of the process for designing the label
in question.
In fact, according to the aforementioned survey,
79% of those interviewed affirmed they purchased
products at an above-average price if they were
manufactured with wind energy or if it was used
during the production process. As in the previous
questions, countries such as India or China easily
exceeded the ratings provided by Germany, the
United Kingdom and Canada. The United States
recorded the worst rating in the research for all the
issues related to climate change.
Finally, within the framework of the campaign
for energy transparency, the firm launched the
“CaCoCos” group, which stands for Carbon
Conscious Companies, an alliance of businesses
committed to wind as the main energy for
manufacturing in the future, and which understands
that companies need not be part of the problem but
rather part of the solution to the issue of climate
change.
An important detail for understanding the scope of
this initiative is that 10% of the annual electricity
consumed by the world’s 1,500 largest corporations
is equal to the total amount of electricity used in
Graphs 1: Priority areas by market
Slightly serious
USA
Serious
84 %
13%
22%
Canadá
UK
Respond
Serious
Germany
Very serious
49%
China
29
22
42
72%
21
27
30
27
49
India
63
Very serious
Serious
79%
22
23
74
85%
16
12
84%
14 4 92%
17 10 90%
Slightly serious
Source: Morten Albaek, 15th International Conference on Corporate Reputation, Brand, Identity and Competitiveness, 2011.
Cases
2
3. When the wind of
reputation blows
in favour: Vestas
and a new model of
humanistic capitalism
Graphs 2: The World‘s first global consumer laber for renewable energy
1969
1978
1982
1989
1992
2002
Source: Morten Albaek, 15h International Conference on Corporate Reputation, Brand, Identity and Competitiveness, 2011.
Australia, or six times the consumption of an entire
city such as New York, or thirty times the power
generated by the Hoover Dam on the Colorado
River (United States).
‘Doing
more than
companies are
accustomed
to in
environmental
matters, and
with society
it is a visible
part of the
pillar the new
reputation
will be’
The power of transparency
This series of actions has a clear goal: to change
the relationship between energy utilities and their
stakeholders, investors and, especially, consumers,
seeking a more transparent way of interacting with
them and modifying the premises underpinning
their relationship with the world as a whole.
Vestas considers transparency itself to be a clear
accelerator of the energy change process. The
creation of the CREX is, furthermore, a very useful
tool when adding transparency to the global energy
procurement process in the field of renewable energies,
by analysing, documenting and evaluating the
amount, as well as the source, of such transactions.
At the heart of the strategy pursued by Vestas,
transparency is a useful tool for improving and
extending the investment in renewable energies and
the supply chain, as well as being a mechanism for
revealing the truth behind the supply and demand
of clean energies and the possibilities of driving
their growth.
As a result of this entire strategy developed by
Vestas, and in terms of the outcomes related
to reputation, between 2009 and 2011 the firm
recorded a consolidated increase of four points in
the Global RepTrakTM.
Conclusion: companies as social agents
Arguably of greater interest in the Vestas case
is not specifically how it was done, but rather
what was done: the Danish wind energy firm has
decided, in an original and almost unique case in
the world so far, to leader a type of social initiative
– transparency regarding energy consumers in
product manufacturing – which had hitherto been
the domain of NGOs.
Doing more than companies are accustomed to
in matters related to environmental policies, in
particular, and social ones, in general, is a clear
part of what we can affirm will be the spearhead
for building the new reputation, or the main pillar
upon which it will be based. Regarding that task,
that endeavour, the CCO will have a key role
to play when internally arranging the policies
to be rolled into the path of the new winds of
reputation that are set to blow –or indeed are
already blowing.
Cases
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