Trade Association Audits: How Do They Reduce Greenwashing Risks?
More brands are starting to recognize that one of the greatest sources of impact they can have is through advocacy on smart public policy.
But successfully engaging in the regulatory process can produce hidden conflicts and barriers in the form of trade associations.
Here’s a double click into one key element of our business advocacy playbook: understanding the political landscape.
Why Is A Trade Association Audit Helpful In Reducing Greenwashing Risks?
Many consumer-facing brands are sensitive to the fiscal risks associated with greenwashing. While corporate political initiatives commonly include more than just participation in trade associations (i.e., political spending, lobbying, etc.), that participation can represent a disproportionate share of risk related to greenwashing.
In a nutshell, here’s how the greenwashing risk for businesses is generated:
Company A makes public statement B or takes action C on a public policy issue.
Company A is also a member of trade association D.
Trade association D is actively working in opposition to position B and action C of Company A.
Company A unnecessarily inherits greenwashing risk due to misalignment between its position/action and those of trade association D on the public policy issue.
This includes three types of fiscal risks for businesses related to greenwashing: regulatory, legal, and reputational.
By examining the alignment between businesses and their trade associations through an objective third party audit we can reduce the risk associated with greenwashing.
Business Advocacy Playbook
We’ll start by putting a trade association audit in the context of public policy advocacy work more broadly. While it’s certainly possible to conduct an audit in isolation, we often recommend to our clients that they do one as part of an advocacy campaign.
Engaging with a trade association can be an important element in reducing risk and driving regulatory change but frequently needs to be paired with other strategies as well.
Before launching an advocacy campaign we advise businesses to ask three threshold questions:
Is this issue materially relevant to the business?
Is this issue suitable for changes in public policy (read broad)?
Is action on this issue timely?
If the answer to all three of these questions is yes then we recommend proceeding with building an advocacy campaign plan.
One element of the campaign plan includes what is called a “stakeholder landscape assessment.” In short, this involves identifying which organizations are currently or may become active on the public policy issue you’re planning to advocate for. We want to understand their positions, motivations, resources, and weaknesses.
Our Trade Association Audit lives in the stakeholder landscape assessment element of our playbook. While we offer it as a stand-alone service, it is also commonly a part of our comprehensive advocacy campaign projects with clients.
Download our free business advocacy playbook to learn more about how to change public policy - including engaging trade associations
Understanding the Stakeholder Landscape: Trade Associations
When it comes to understanding the stakeholder landscape related to any public policy, trade associations often have a significant role.
We often see them working in opposition to public policies that address material sustainability impacts in and across industries, but not always. They frequently will also hire outside lobbying firms to represent their interests.
For our Trade Association Audit service we have two objectives:
Identifying and mitigating current or future greenwashing risks associated with misalignment between the policy positions of your business and trade associations that you may be members of now or in the future
Effectively analyze the nature and extent of engagement that other trade associations may have on your public policy issue so they can be addressed in your campaign strategy
Our audit features three phases: 1) Organization Identification, 2) Position Analysis, and 3) Risk Mitigation Planning
Audit Phase 1: Organization Identification
During the first phase of our trade association audit, we want to define the universe of organizations that may have policy positions that we need to analyze.
To do this we answer to following questions:
Which trade associations are relevant to your industry? This may include single-industry, region-specific, or multi-industry associations.
Which trade associations is your business currently an active member of?
Answering these questions helps us understand which trade associations that may be involved in your public policy issue.
It serves as the foundation for identifying misalignment and mitigating risks as well as effectively integrating these stakeholders into your advocacy campaign plan.
Audit Phase 2: Policy Position Analysis
The second phase of our audit involves identifying the policy positions of the trade associations identified in Phase 1.
We want to understand if there are current or anticipated conflicts between the positions of the trade associations and those of your business. As we previously noted, these misalignments are one of the root causes of potential greenwashing risks for your business.
Then we want to evaluate the policy positions (public and private) of the trade associations that are relevant to your industry.
Looking at the universe of trade associations that are relevant to your industry, and not just those where your business is a member, is a key part of this phase. Even if a relevant trade association isn’t currently active on an issue they may become engaged over time.
Audit Phase 3: Risk Mitigation Planning
The final phase of our audit involves using our findings from our policy position analysis to craft a risk mitigation plan that addresses misalignments between the public positions and actions of your business and those of relevant trade associations.
This plan typically includes one or more of the following strategies and their associated tactics:
Create new trade association policy position(s)
Eliminate existing trade association policy position(s)
Publicly withdraw trade association membership
We often also integrate the findings of our audit into the advocacy campaign strategy.
Depending on the policy issue, political context, and stakeholder landscape, your whole campaign strategy may be focused on engaging trade associations.
More often, though, engaging trade associations is only one element of a more holistic campaign strategy.
For some helpful guidance on engaging trade associations as part of your campaign strategy, we think this World Resources Institute post from a couple of years ago does a good job.
Let us mitigate your greenwashing risk with our Trade Association Audit
Get in touch if you’d like to learn more.