Why do companies belong to trade associations?

The primary reason companies join trade associations is to lobby. Lobbying is when individuals or organizations communicate with lawmakers to influence specific policies at the federal, state and local levels.³ Companies lobby on a range of issues that they consider important to their business.

The Lobbying Disclosure Act requires lobbyists, trade associations, and other organizations to report their activities regarding Federal legislation every quarter. That means that if a company talks to a member of congress about a particular bill they need to record that meeting. Lobbyists are also required to disclose how much money they spent advocating for specific issues. They do not, however, have to state their position for or against the bill. California is the only state with similar requirements. Lobbying in the remaining 49 states is not transparent.

Although trade association lobbying is public, these groups do not have to disclose their members or the source of their donations. For example, the Business Roundtable publicly lists all member CEOs.⁴ However, the U.S. Chamber of Commerce does not disclose its general members, but does publish its board of directors. This lack of transparency allows companies to be able to influence legislation as trade association members without public scrutiny. A company can then have a reputation for supporting pro-climate policies in public, while simultaneously undermining those positions through their trade memberships. As recently stated by IPE Magazine, “As long as industry associations are allowed to lobby against sustainability-related policies, companies will be able to publicly commit to sustainability goals while others pursue their short-term interests.”