Walking the Talk
Attention, Businesses:
Don’t Let Your Trade Associations Undermine You on Climate Action

The SB Brand Transformation Roadmap guides companies on the pathway to continuous improvement through performance against five key characteristics.

“Transparent and Proactive Governance” is one of those characteristics. The third of the five levels of performance calls on companies to ensure:

Participation in trade associations and other similar bodies is aligned with company sustainability priorities.

The top level of performance, level five, calls for a:

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Demonstrated willingness to lead and convene other brands and the broader economic ecosystem in an effort to “change the rules of the game.”

If there ever was a critical time to do this, it’s now — as we start the run-up to the all-important COP26 in Glasgow next year.

On October 15, we at WRI joined 10 partners in the environmental and sustainable business space to introduce the AAA Framework, which calls on companies to advocate for smart policies based in science, align their trade associations with this position, and allocate political spending to advance these outcomes.

WRI has long been active on the role of corporate engagement in policy and trade associations, in particular; which fits squarely within the align component of the AAA Framework. In 2013, we jointly released a Guide for Responsible Corporate Engagement in Climate Policy, to which 130 companies have made a public commitment.

What does good trade association alignment look like?

We see two different paths on the road to trade association alignment, but they both start with the same step: a thorough accounting of your company’s current position. How does your company’s stance on climate change compare to that of the organizations you pay to represent your interests? For most of you, we suspect this analysis will fall short of a 100 percent match. For a few, this may be a deliberate strategy to draw praise for a climate-friendly reputation while allowing a trade association to ensure a “business as usual” environment. For others — most, we hope — misalignment is inadvertent, a lack of awareness of the climate stance and impact of your trade association. And some of you may be aware of the difference but have made a conscious decision to stay a member because other issues the association addresses are also important.

We know companies have many issues to juggle and that representation on one issue can outweigh misrepresentation on another. However, on climate, we don’t have time to waste.

If an audit of your trade association memberships reveals misalignment, the leadership criteria of our new framework offers a choice. Leave an association due to differences on climate or stay and effect change from within. Here are five steps your company can take to make sure this happens:

1) Conduct an audit

Complete a thorough assessment of your associations’ positions on climate change, as compared to internal company positions. Make the audit results public and commit to re-auditing associations on a regular basis.

2) Develop a strategy

Armed with information on areas of misalignment, make a plan to self-correct — including developing criteria for how to make decisions around association membership. What conditions must be present for you to leave? What conditions must be present for you to stay and commit to changing your association’s position from within? Be clear. Set up explicit criteria for what success looks like and appropriate timelines for effecting change.

3) Speak out

When a trade association speaks or acts on a climate issue with which you disagree, it is no longer sufficient to point at your company’s own words and actions, and say it is clear you have a different position. Tell your association’s leaders that they cannot claim or even imply that they represent you on climate. Every time they take action or make a statement that goes counter to your position, make that difference explicit, publicly.

4) Leave, if necessary

Trying to achieve alignment through engagement may not pay off. Following criteria outlined in your company’s strategy, leave associations where attempts to change prove ineffective or insufficient and/or where leaving is perceived to be most aligned with company goals and climate needs.

5) Be transparent

Publicly disclose all positions, actions and outcomes; including listing all trade association memberships, audit results and efforts to hold associations accountable.

The AAA Framework raises the bar when it comes to corporate leadership on climate change. However, many companies are already racing ahead. Unilever CEO Alan Jope wrote an open letter to the company’s trade associations and business groups, asking them to confirm their current lobbying position on achieving a 1.5° future. Mars, Nestlé and Unilever all pulled out of the Grocery Manufacturers Association to form the Sustainable Food Policy Alliance (with Danone North America), citing climate as a key reason for the split. Shell recently published a report evaluating the 19 industry associations to which it belongs on climate-related policy, ultimately leaving the American Fuel & Petrochemical Manufacturers Association over “material misalignment” on climate change policy. And a group of companies within the US Chamber of Commerce has been a critical force in shifting the association’s stance on climate change, leading to the formation of a new Task Force on Climate Actions and public recognition by the Chamber that “the climate is changing and humans are contributing to these changes.”

We hope these examples are just the beginning. Now is the moment to build the next wave of corporate alignment on climate policy and advance your company’s position on the SB Brand Transformation Roadmap.

Note: A version of this post originally appeared on World Resources Institute’s Insights blog. Unilever, Mars Inc., Nestlé and Shell have provided financial support to WRI. This blog post solely reflects the views of the authors.