Introduction

Policy engagement is a critical lever for business success. Businesses face policy-related risks but also rely on an enabling environment to achieve sustainability targets. Trade associations can shape policy outcomes; aligned associations amplify a company’s agenda, while misaligned ones undermine direct advocacy. This playbook provides a framework for companies to manage indirect policy engagement and ensure trade associations support their goals.

Step 1: Internal strategy and alignment

Companies should integrate policy engagement into their risk management strategies. Because achieving transition plans depends on the regulatory environment, businesses must focus on material policy issues. Aligning positions with science is critical; sectoral transition strategies and independent evaluations serve as benchmarks. With the world on track for more than 2.5 degrees Celsius of warming, aligning with science requires actively pushing for higher ambition policies rather than just supporting existing regulations.

Step 2: Articulating and communicating actionable policy priorities

Companies must define concrete policy positions rather than simply asking associations to align with the Paris Agreement. Corporate climate agendas should include quantitative, timebound goals that act as benchmarks for policy proposals. Companies should endorse specific policy instruments and adapt positions for different markets. Proactively notifying trade associations about these goals is a quick win. Companies must communicate expectations clearly to enable associations to align their advocacy.

Step 3: Assessing associations’ alignment and effectiveness

An assessment identifies which associations align with a company’s priorities. Because assessments are resource-intensive, companies should prioritise associations based on their influence on policies and the company’s influence within the group. Assessments should evaluate detailed engagement activity and intensity. Using publicly available data is crucial, avoiding reliance on self-reporting. Companies are advised to disclose their findings in a climate advocacy report to drive progress.

Step 4: Engaging with associations to improve alignment and impact

Effective engagement requires collaboration between sustainability and government affairs teams. Companies should focus engagement strategically, sometimes prioritising associations with a mixed sustainability record over highly misaligned ones. The engagement process involves raising issues, proposing changes to policy positions, and taking escalation steps if progress is insufficient. Coordination with like-minded members is a critical success factor. If misalignment persists, companies can use the threat to leave as leverage.

Step 5: Reviewing association memberships

Regular review of memberships ensures companies receive value. The extent to which an association supports a company’s climate agenda must factor into renewal decisions, weighed against other benefits. Implementing a points-based system, such as scoring out of 100, informs decisions better than a simple binary rating. Companies should also seek to join or establish new associations that possess a positive policy agenda.