Microsoft Corp. has left the American Legislative Exchange Council (ALEC) because of concerns about the lobbying group's opposition to renewable energy, a coalition of activist investor groups said.
The Sustainability Group and Walden Asset Management, asset management companies that describe themselves as focused on sustainable investing, said Microsoft confirmed in e-mails that it's no longer a part of ALEC after the groups pressed the company to abandon it.
“Microsoft is a leader on carbon issues—in 2012, it committed to becoming carbon neutral, and is one of the largest corporate purchasers of renewable energy,” the Boston-based groups said in a news release. “Thus, we believe that its affiliation with ALEC, which is actively fighting policies that promote renewable energy, was incongruous. In addition, there were numerous other ALEC actions that conflicted directly with Microsoft's values.”
Arlington, Va.-based ALEC has drafted model legislation for use in state legislatures to roll back renewable fuel standards across the country. Its members include ExxonMobil Corp., Peabody Energy Inc., American Electric Power Co. and Koch Industries Inc., according to the Checks and Balances Project, a nonprofit watchdog group that supports the use of clean energy.
In response to a request for comment, Microsoft told Bloomberg BNA: “In 2014, Microsoft decided to no longer participate in the American Legislative Exchange Council (ALEC) Communications and Technology Task Force. Our trade association memberships are determined annually on a case by case basis and are based on a number of factors, including evolving policy priorities, business needs and available budgets.”
Question of Budget Cuts
Bill Meierling, a spokesman for ALEC, said Microsoft left the organization July 16 for budgetary reasons and not as a result of the group's positions on renewable energy.
“They left because of budget cuts. They are rearranging their government relations here in D.C.,” Meierling said in an interview with Bloomberg BNA. “This is groups opposed to ALEC up to their old tricks.”
Microsoft announced July 17 it planned to eliminate as many as 18,000 jobs, the largest round of cuts in its history, Bloomberg News reported.
The Sustainability Group, along with Walden Asset Management, said in a joint news release Aug. 19 that they began pressing Redmond, Wash.-based Microsoft to leave ALEC in 2013.
According to the groups, Microsoft, which had been a member of ALEC's Communications and Technology Task Force, sent an e-mail on July 14 that said, “We are no longer members of ALEC and do not provide the organization with financial support of any kind.”
E-mail Called Part of Ongoing Dialogue
In an interview, Timothy Smith, Walden Asset Management's senior vice president and director of environmental social and governance shareowner engagement, said the e-mails, which the group sent to investors last month, were part of an ongoing dialogue Walden had been having with Microsoft.
“It was an ongoing debate inside the company,” Walden said of the company's participation in ALEC.
Walden, which manages $8 billion in assets, considers Microsoft one of its major holdings, Smith said.
ALEC approved model legislation for the 2013 legislative session designed to be used to repeal states' renewable portfolio standards and wrote a new version for 2014.
The standards, which exist in 29 states, have been credited with being one of the largest drivers of renewable energy generation in the U.S. and are expected to drive more than 40,000 megawatts of renewable electricity generation by 2015, according to the Energy Department.
According to the Environmental Protection Agency, 50 percent—or more than 1.3 billion kilowatt hours—of the power used by Microsoft annually comes from renewable energy sources, including biogas, biomass, solar and wind. That makes it No. 3 on the EPA's list of top companies that voluntarily use renewables.
Called Example to Others
“Microsoft has demonstrated a commitment in recent years to clean energy and climate action by introducing an internal carbon fee and purchasing large amounts of wind energy to power two of its data centers—all actions which run contrary to ALEC's goal of killing the clean energy economy,” Greenpeace Senior IT Policy Analyst Gary Cook said in a statement.
“Google, Facebook, eBay, Yahoo, Yelp and other technology companies that are currently still ALEC members would do well to learn from Microsoft's leadership,” Cook said.
Other major corporations that have left ALEC include Coca-Cola, General Motors, Bank of America and Procter & Gamble, according to Common Cause, a Washington, D.C., group that has challenged ALEC's status as a nonprofit organization.
According to Common Cause, “the exodus” began in 2011 after public exposure related to the group's development of proposals to block renewable energy, as well as other issues such as restrictive voter ID requirements, anti-union measures and “Stand Your Ground” gun bills.
Consumers Should Decide Energy Choices
Meierling said ALEC continues to grow and isn't opposed to renewable energy specifically. Rather, Meierling said, the group believes consumers, not mandates, should decide consumer energy choices.
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