Investors, activists press eBay, others to break up with ALEC

Reuters News
Posted: Oct 07, 2014 5:13 PM

By Valerie Volcovici

WASHINGTON (Reuters) - More than 80 environmental, labor and civic groups on Tuesday urged eBay Inc to end its association with the political group the American Legislative Exchange Council (ALEC), weeks after Google Inc abruptly left ALEC over its views on climate change.

Civic groups such as Common Cause and the Environmental Defense Fund and unions including the International Brotherhood of Teamsters wrote to the e-commerce company's management asking it to reconsider involvement in ALEC because of what they called its "extreme agenda."

ALEC is a coalition of about 2,000 state lawmakers and corporations that promotes free markets and limited government. It often drafts legislation for states to adopt, a handy service for often resource-strapped state lawmakers.

ALEC did not respond to requests to comment.

Critics fault ALEC for promoting measures to deny the existence of climate change, defund public services, oppose Internet neutrality and limit workers’ protections.

Google Chief Executive Eric Schmidt said in September that his company wanted out because ALEC was “literally lying” about climate change. Yahoo Inc, Facebook Inc and Yelp Inc left ALEC soon after.

“The Google announcement made it difficult for some of these companies to hide in the shadows anymore,” said Nick Surgey, director of the Center for Media and Democracy, a watchdog group.

Companies such as Microsoft Corp and Google have touted renewable energy programs or voluntary carbon emission targets, contrary to some of the policies promoted by ALEC.

Microsoft ended its membership in August, citing changing priorities and budget issues.

Investors and corporations are under greater scrutiny on their positions regarding climate change, said Timothy Smith, director of shareowner engagement at Walden Asset Management.

“For companies with a strong position on climate change, like Microsoft and Google, it was one of the very real contradictions in their policies,” Smith said.

Sustainability-focused investors see the recent moves by some of the world’s most recognizable companies as a chance to push for a mass exodus from ALEC.

EBay seems unlikely to budge; it believes that there are issues beyond climate change that ALEC promotes that are “material to the success of eBay Inc and our customers,” said Abby Smith, eBay spokeswoman.

While she acknowledged this may at times conflict with the company’s climate and energy strategy, “our team of internal stakeholders meets regularly to assess the best approach for resolving these issues.”

Walden Asset Management and The Sustainability Group, an investor organization, see the ALEC campaign extending beyond technology companies.

Occidental Petroleum Corp and International Paper Co recently announced they were no longer participating in ALEC but declined to comment further.

Walden plans to present up to 50 companies in 2015 with shareholder proposals to come clean on lobbying activities and ALEC membership.

Despite the departures, Lisa Nelson, ALEC's chief executive, told the National Journal last week several new companies may join and that it is “poised for growth.”

(Reporting by Valerie Volcovici. Editing by Ros Krasny and Steve Orlofsky)