How trade associations can help put the world on a sustainable path – WBCSD

WBCSD and Volans are collaborating to co-create best practice guidance for companies looking to assess, align and activate their trade associations on sustainability-relevant policy issues. This work will build on the many existing resources available to companies – notably the Business Associations Climate Action Guide published earlier this year, which both WBCSD and Volans contributed to.  

This blog by Cami and Richard at Volans outlines a new thought piece by Volans exploring how trade associations, representing diverse industries, can influence government policies, build consensus, and mobilize resources for climate action, emphasizing the opportunity to turn historically lagging associations into drivers of the transition to a net-zero world.

Leading companies increasingly recognise the importance of policy engagement as a tool for enabling progress on their sustainability goals. As they develop detailed climate transition plans, companies are having to think through the extent to which their ability to achieve them is dependent on policy change. Having done this, the next step is to figure out way to help get relevant policies enacted and implemented. Since much corporate political influence happens via trade associations, ensuring associations actively promote aligned positions is vital. 

Before we get into tactics for engaging with and mobilising trade associations, we need to understand the nature of the opportunity we are targeting. What is the positive story about the role trade associations could play over the next decade and what are the steps required to make that story a reality?  

This is the question that we seek to answer in our new report, How trade associations helped put the world on a sustainable path: Looking back from 2035. The report is for anyone working on – or interested in – harnessing the political influence of the private sector to promote government policies that drive a transition to a sustainable future.  

At the report’s heart is a simple mental model for thinking about how different trade associations currently engage on climate policy. We identify four distinct categories: 

1. Accelerators: associations that consistently and actively lobby for a science-based, Paris-aligned policy agenda 

2. Sleeping giants: associations that broadly support the goals of the Paris Agreement but do very little to actively promote Paris-aligned policies   

3. Conflicted catalysts: associations that support the goals of the Paris Agreement in principle, but often lobby to delay or weaken climate policies in practice  

4. Blockers: associations that consistently and actively lobby against a science-based policy agenda 

Categorising associations in this way allows companies to set targeted objectives and strategies for different types of association. To adapt economist Albert Hirschman’s classic framework, companies have two potential modes of influence: exit or voice. We argue that exit is the most appropriate course of action for blockers: the goal is to erode their funding base and their legitimacy, on the basis that trying to convert them to pro-climate advocacy simply isn’t feasible. Conversely, for accelerators, the goal is to increase their resources and influence. That means more companies joining such associations, or for those that are already members, increasing their level of support for the association’s work. 

For the other two categories – sleeping giants and conflicted catalysts – voice is the more relevant lever (at least in the first instance). With sleeping giants, the goal is to activate them – leveraging the fact that they typically already have considerable resources and influence to turn them into powerful accelerators. The main challenge here tends to be convincing such associations that climate policy is “in their lane”: associations representing sectors like tech, consumer goods, healthcare and financial services have traditionally steered clear of climate policy debates. But the choice not to engage is becoming harder to justify as more of their member companies set climate targets that can only be achieved if the policy and regulatory context evolves in a positive direction. 

Finally, conflicted catalysts. These are associations that take climate action seriously but tend to view it as a second-order priority behind more traditional considerations of competitiveness and minimising the regulatory burden. If a particular policy is perceived as a threat to their members’ short-term commercial interests, their default response is typically to seek to block, weaken or delay it. Over time though, if enough member companies pushed for these associations to take on a dual mandate – minimise the cost to industry and accelerate the transition to net zero – they could become vital sources of constructive ideas for policymakers, who are often wrestling with precisely the same challenge. 

To summarise, we believe that the business community as a whole can become an accelerant of, rather than a brake on, the implementation of Paris-aligned policies. But it will require pro-sustainability companies to become much more robust and sophisticated in how they manage their indirect “political footprint”. Some companies are already on this journey, but many more corporate allies are needed to turn the story of how trade associations helped put the world on a sustainable path into a reality. 

Read the full report here.