BP and Google Leave ALEC: Are Companies Finally Taking Climate Change Seriously?
It began with Microsoft in July, then Google in September – and now Facebook, Yelp, Yahoo, SAP America, AOL and eBay have all followed suit. These companies have now ended their relationship with the controversial American Legislative Exchange Council, or Alec.
This isn’t the first exodus Alec has seen. Companies such as Amazon, Coca-Cola, McDonald’s and Walmart also pulled out of the group after it supported Florida’s 2005 “stand your ground” gun law after an unarmed black teenager, Trayvon Martin, was killed by a neighborhood watch volunteer, George Zimmerman, in 2012.
But the recent exodus is the first that is largely attributable to the organization’s views on climate change. The trend highlights a major change in business attitudes towards climate change, indicating – perhaps for the first time – that major tech companies see environmental regulation as key to business.
This tech shift has sent shockwaves through climate advocacy circles. But perhaps even more fascinating has been the simultaneous distancing from Alec by major corporations affiliated with the fossil fuel industry.
Since September, Occidental Petroleum, Emerson Electric, Wells Fargo (a major O&G investor), Union Pacific, Northrop Grumman, and BP have all announced they too are discontinuing their Alec membership. And while these companies were more elusive about the rationale for their respective withdrawals, recent campaigns and engagement by shareholders likely had them feeling the heat on climate action.
Companies across all industries would be wise to take heed of this case study. Perhaps more than any other story on this topic in recent months, the Alec climate saga illustrates the rapidly evolving landscape in which sustainable businesses are expected to play. In this new, polarized and hyper-connected world, action on climate change is increasingly framed as a moral issue on par with social causes like workers rights and racial equality. To deny climate change is to risk alienating millennial consumers and open the door to activist campaigns.
The Alec emigration is also a lesson to companies that sustainability cannot be separated into its own silo. Google, for instance, has made strong strides reducing its carbon footprint, but this progress has not been reflected in its political spending and partnerships. Businesses and nonprofits alike (see the recent Susan G Komen Foundation-Baker Hughes debacle) committed to responsible causes must vet all departments and communications for actions that could be seen as hypocritical, and ensure that the company they keep aligns with their sustainability vision.
Lastly, the remarkably short time frame in which an entire sector shifted its rhetoric shows that lagging behind on climate change – either in action or in posturing – is increasingly likely to lead to brand damage. Campaigners are growing incredibly savvy and innovative. Companies might feel far removed from the climate change debate, but to stay silent or partner poorly is to risk going viral for all the wrong reasons (see Greenpeace’s Lego-Shell campaign or Climate Parent’s Radio Disney-Ohio Oil & Gas Association campaign).
Climate change is not the only issue facing growing stakeholder concern, of course. The Alec example is just a small part of a larger trend occurring in the consumer marketplace, one that we at Future 500 call “brand politics”.
Corporate stakeholders and consumers increasingly care not only about how sustainable a company’s own products and operations are, but also what that company stands for – and with whom they stand. Consumer-facing brands are particularly compelling campaign targets in this movement, as their prominence makes it easier to garner public attention and can ultimately provide inroads to bigger, but less recognizable, corporate players up or down the supply chains.
While companies shouldn’t feel obligated to capitulate – or even respond – to each petition sent their way, executives should begin establishing their positions on trending topics of social consequence, and proactively identifying key stakeholders.
The majority of global brands now recognize that ignoring climate science is bad for business. In the years ahead, nearly all consumer-facing companies (and their suppliers) face the likelihood of being asked to take a clear public position on an ever-expanding group of environmental and social issues, from carbon pricing to income inequality. Encouragingly, many forward-thinking companies are seizing this momentum to proactively partner with civil society organizations, and to advocate for progressive climate policies and other mitigation strategies like renewable energy growth, forest protection, and materials innovation.
In the case of Alec, expect campaigners like Forecast the Facts and CMD to shift the pressure to remaining group members with prominent brand recognition, such as Expedia, Comcast, FedEx, Pfizer, and Shell. In the broader marketplace, businesses striving for sustainability should recognize that their influence – and therefore their accountability – spreads further than they think.
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