Vattenfall- the importance of honesty

After  just having completed the live case study scenario with Vattenfall in module 5 at Stockholm School of Economics (SSE) regarding their CSR and branding and communication strategy, it is with mixed emotions that I today acknowledged when I opened up my DN newspaper and the economy section this morning, the following article, published on the 28th May 2010.

“Vattenfall gets rid of their environmental profile” – Vattenfall will no longer market themselves as leaders in the environmental area. Instead, the new CEO Oystein Loseth, wants to focus on profitability.

The energy giant Vattenfall’s switch of CEOs now makes the company head in a new direction and focus. Among others will the marketing no longer focus on the company being environmentally friendly and proactive, as emphasized by the old CEO Lars G Josefsson. – For our sake it is very important that we are being honest and can support the portfolio that we actually have, says VP Elisabeth Ström.

The dramatic pictures (recall the polar bear tipping of his ice sheet etc.) produced and broadcast on TV and the web all over Europe in 2008/09, and used to communicate the company’s environmental and strategic effort of ‘Making Electricity Clean’, will no longer be the central message delivered by the firm. The company has  spent large sums on advertising on the topic in Sweden during the last couple of years and was one of the main sponsors of the COP 15 climate meeting in Copenhagen. Josefsson even called himself climate advisor when introduced to the german chanselor Angela Merkel and was also invited to speak with George Bush, regarding climate warming, in Washington. Time Magazine even selected him in October 2008 as “Mr Clean”.

The reality check caught up to Josefsson and Vattenfall however, and after last summer the board decided to replace him with the new CEO, Oystein Loseth, hire a new VP and replace several PR and communication managers, clearly signaling that the company will decrease their environmental profile to avoid accusations of double moral standards.

– We will no longer focus our communication on being a leader in the environmental area. The reality is that we are both renewable and fossile. And in between these we have nuclear energy as a transition source. We will be in these areas of energy for a long time and therefore it is of utter most importance to make the consumers and society understand why, says Elisabeth Ström. At the company’s annual shareholders’ meeting Oystein Loseth also clearly stated that “it is time to focus on the profitability”.

Vattenfalls owner, the Swedish state, and the government is also satisfied with the new communication strategy. – It might have been a problem for the surrounding world to see the clear connection between the company’s long term vision and the short term actions taken. Nevertheless, this does not however, by any means, change the overall ambition of becoming more environmentally friendly. Instead we now have created much clearer owners’ directives that proclaim the environmental ambitions for the entire company structure, says the enterprise ministers Maud Olofsson’s state secretary Ola Alterå.

Clearly this is raises some interesting questions after the live case.

  • What is the company’s true efforts and ambitions?
  • Were the presence of five (?) CSR /PR/ Communication managers at the last seminar only a showcase to us students?
  • What will happen with the company’s corporate image, already very diluted in certain regions?
  • What will the NGOs reaction to this be?
  • And even more important, will or has rather, the marketing function once again been discarded from the corporate agenda?

For a handful of comments and opinions on this, please review the article in full in the DN newspaper or (hopefully) soon also on DN.se

// Mikael M

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2 Responses to Vattenfall- the importance of honesty

  1. Lisa Enckell says:

    I find this very interesting and I think, from a communication perspective, that this is exactly the right way to go for Vattenfall. Marketing and communication can never decrease the CO2 emissions, only operations can. When the company is doing one thing, but communicating another, there will clearly be an issue for the trustworthiness of the brand.

    I think, that almost all the groups from our class who presented for Vattenfall were very clear with the message. – Honesty and transparency must be guiding the communication.

    As for any crisis communication strategy, acknowledging the problem is the first step. What they did in this article was saying: we must be honest, and we have not been successful in our previous communication. i.e. acknowledging their problem.

    I would not be surprised if they in 6 months or so start communicating successful progress in their research for renewable energy or CCS technology, but before they can communicate anything like that, they need to build up trust in their brand.

    Another interesting aspect is of course how their competitors will react on this. I thought it was interesting that Fortum had 1 full page ad today where they marketed their progress, current and future investments in biofuel. I guess their marketing department also read DN and wanted to make us of the situation to position themselves as the environmental-friendly alternative now when Vattenfall clearly has stated that it is not their focus anymore.

  2. Pingback: Vattenfall – om ärlighet och kommunikation « Enckelli

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