Harvey Nash Oil & Gas Board Dinner – guest speaker, Mr. Sam Laidlaw, CEO, Centrica
- Leonor highlighted that this was the second year the event was organised in partnership with RAFT and Sam Laidlaw, a long standing supporter & trustee had kindly donated his speaker’s fee to RAFT.
- RAFT is medical research charity that has spent 25 years working on solutions for skin trauma problems. Their approach is to only conduct research if it is tangible, cost effective and they can ensure it will get to patients quickly.
- RAFT has always had links with the Oil and Gas industry with multiple senior oil and gas figures serving as trustees both past & present (Sam Laidlaw, Alan Henderson, Rob Pinchbeck & Francis Gugen)
- Leonor offered RAFT’s new value added proposition: She noted that the oil and gas industry supported RAFT research, which has enabled them to increase their impact and has showed her that there are lots of oil and gas corporate social responsibility initiatives that are not widely known.
- Her proposal was to ask people in the room to give her 15 minutes of their time to talk about corporate social responsibility. Why do you do it? What do you do? What is the impact? So that she can compile a report on CSR for the oil and gas industry.
- The Boston Consulting Group have offered to put this report together on a pro bono basis and circulate across oil and gas businesses to be used for marketing, internal communications and benchmarking of their own CSR initiatives.
- RAFT would like to extend their corporate support network but in order to do that they need to understand the motivations behind corporate social responsibility so their corporate programme is fit for purpose.
- For every charity, partnerships with corporates need to offer mutual benefits because ultimately they recognise they are competing with other charities and need to offer value in return for the support which is why she proposes the creation of this independent marketing tool.
- Sam began his career in energy in 1981 with this advice from his Father (a notable industry figure) – [my father said] “whatever you do, don’t go into the oil and gas industry” – his advice was based on the widely held perception in the 1970s that oil was depleting, hence opportunities in the industry would disappear
- Sam joined the oil and gas industry in the U.S. following university, working across businesses exploring the technical challenges faced by the oil and gas sector such as deep water exploration and the identification of new technologies.
- He plans to step down from his role at Centrica at the end of the year and in this speech he reflected on where, as an industry, we are now and how we plan to move forward.
- The perspective from the public around energy companies is one of scepticism, anger and public hostility
- There is a mistrust that stems from people face rising energy bills with the profits of companies in the energy industry seemingly increasing. This perpetrates the view that big companies are profiting at the public’s expense.
- The public feel taken advantage of but they are ultimately the customer and the energy company’s license to operate hinges on public support.
- As a response to this scepticism, Centrica broke down the elements of the bill to show people that their profit only consists of 5% of the bill.
- To rebut these fears, we need to address the following question: what do energy businesses do for the customer? [The energy companies] manage risk by buying energy resources from volatile wholesale markets. This protects customers from the daily changes in market rates for resources. Customers seek the insurance that this smoothing of the volatile prices offers. What Centrica essentially does is manage the supply and the security and stability of supply, which is just as important as ensuring its affordability.
- Profit margins, when broken down are the same as those offered by supermarkets and it can be shown that public opinion overestimates profits in the energy sector. It is this perception of ‘excessive’ profitability that needs to be managed. This needs to be coupled with openness and a desire to minimise energy costs.
- How do we achieve environmental goals? By thinking and discussing more about the importance of investment and the fact that companies need healthy profits to ensure investment continuity. Moreover, the main benefit of competition in energy markets is that it delivers innovation, which reduces the costs of capital leading to direct benefits to consumers.
- There is a need for access to capital markets, which is why the main energy suppliers need to be private businesses. Private ownership of energy is the best way to balance multiple stakeholder interests. Ultimately the reason why these companies need to make profits is so that they can secure investment. Thus, capping energy bills would inevitably lead to investment flight.
- The conclusion arrived at is that energy security will only come from cross country and cross party collaboration on a long term goals and solution.
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