More companies 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.

If you're not careful, what could be a real source of credibility and trust with consumers can backfire.

Here's a quick review of the risks and an overview of how to assess them through an audit.

Many companies who on 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.

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.

A Trade Association Audit should have two objectives:

1. 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

1. 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 (relevant if you're planning an advocacy campaign)

The audit features three phases: 1) Organization Identification, 2) Position Analysis, and 3) Risk Mitigation Planning

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:

1. Which trade associations are relevant to your industry? This may include single-industry, region-specific, or multi-industry associations.

1. 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 specific public policy issues.

It serves as the foundation for identifying misalignment and mitigating risks when it comes to taking a public position on existing or proposed laws & regulations.

If you're planning an advocacy campaign, then you can also use this analysis into your campaign plan.

It's a safe bet to assume that a trade association of some kind will play a role in your advocacy campaign.

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.

The final phase of our audit involves using our findings from our policy position analysis to craft a risk mitigation plan.

The purpose of the plan is to proactively identify and address 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:

1. Create new trade association policy position(s)

2. Eliminate existing trade association policy position(s)

3. Publicly withdraw trade association membership

We often also integrate the findings of our audit into the advocacy campaign strategy.

Reach out if you'd like to find out how Hilde can support your advocacy efforts: info@heyhilde.com