Insurance and Climate Change column

Sierra Club Dragging State Farm into Climate Change Battle

By | August 27, 2015

A State Farm executive is coming under fire from activists for his position on the board of what some consider to be a “climate denier” group.

Sierra Club, a progressive investor group and other activist organizations have been waging an aggressive years-long attrition campaign to force corporate participants to leave the American Legislative Exchange Council, a nonprofit comprised of conservative state lawmakers and members of the private sector that drafts model legislation and focuses its lobbying on a state-by-state basis.

Groups opposed to ALEC say its philosophies and actions have consistently opposed efforts to combat climate change.

The brunt of Sierra Club’s efforts to pressure ALEC corporate members to disassociate themselves with the group are being carried out on social media and in the form of letter-writing campaigns.

“Tell State Farm: Drop ALEC,” reads one online campaign.

State Farm is among the latest companies that Sierra Club and other activists are pressuing to leave the American Legislative Exchange Council, a nonprofit comprised of conservative state lawmakers and members of the private sector.
State Farm is among the latest companies that Sierra Club and other activists are pressuring to leave the American Legislative Exchange Council, a nonprofit comprised of conservative state lawmakers and members of the private sector.

A webpage tells visitors that efforts by activists have ALEC’s corporate partners “fleeing” the group, and it calls for people to sign a petition to tell Start Farm that it’s in its best interest to leave as well:

“As the largest property insurer in the United States, State Farm’s business model is in serious peril with increasingly-expensive natural disasters. The insurance giant backs action on climate change and has a hefty sustainability section on its website. It’s in State Farm’s best interests to stop undercutting its environmentally-sustainable image by funding climate deniers. Tell State Farm’s CEO to drop ALEC!”

SourceWatch, a progressive “who’s tied to who” tracker, is keeping a list of companies that have dumped ALEC.

By its count 120 private sector members have cut ties with ALEC. Those that have left include: Amazon.com; Berkshire Hathaway Energy; Best Buy; Coca-Cola Co.; Google Inc.; Kraft; McDonald’s; Mars; Microsoft; Wal-Mart; Wells Fargo Co.; and YUM! Brands.

Sierra Club is trying to add to that list State Farm, which is represented on ALEC’s private enterprise council by Counsel Roland Spies. Spies is on the list with representatives from companies like Exxon Mobile Corp., AT&T, Koch Cos. and United Parcel Service.

Spies wasn’t immediately available for a comment, but a comment provided by a spokesman for Bloomington, Ill.-based State Farm maintains that ALEC “exists primarily to research and promote discussion on public policy issues,” and that the carrier’s involvement with the group “is limited to business matters.”

The statement goes on:

“State Farm works with a number of groups representing different political views. Our objective in working with these diverse groups is to ensure that legislators, regulators, and public opinion leaders understand how policy decisions may impact the insurance industry and thus, our customers. State Farm does not agree with, or support, every position of every group with which we work. We nevertheless continue to work with these diverse groups because we believe an open political dialogue that respects and encourages different points of view is often the best way to address the complex challenges we face in and across the country.”

Tim Smith, a director of shareowner engagement with Walden Asset Management, which manages a reported $2.8 billion in assets, is among those working to expedite an ALEC exodus.

Boston, Mass.-based Walden is focused on sustainable and responsible investments, and one of Smith’s roles is helping shareholders petition companies to move toward what are considered more socially or environmentally responsible actions.

“We think that companies who presently, unthinkingly support ALEC, as ALEC is a major player to fight solutions to climate change, are causing a risk to shareholders and are undercutting their credibility,” Smith said.

Smith is part of a contingent that filed a shareholder resolution with UPS this week calling for the giant courier to leave ALEC. He said to expect resolutions to be issued to another 50 companies in coming months calling them out for their lobbying efforts, their ALEC connection and seeking greater disclosure of their investment activities.

“With UPS, which we’re pleased to own, we’re communicating with them and filing a resolution asking them to review their lobbying,” Smith said.

Bill Meierling, ALEC’s vice president of communications and public affairs, said the group is not a climate denier, and that its corporate members have varying interests for their participation.

“In the case of State Farm, they work with us on issues that are of importance to their customers and their employees, like insurance regulation policy and the like in the states,” Meierling said.

A position statement from ALEC on climate change seems to defend itself from its image as a climate denier.

“Climate change is a historical phenomenon and the debate will continue on the significance of natural and anthropogenic contributions,” reads the statement. “ALEC will continue to monitor the issue and support the use of sound science to guide policy, but ALEC will also incorporate economic and political realism.”

According to Meierling, the magnitude of the corporate retreat from ALEC claimed by activists is both exaggerated and wrongly attributed to their efforts on climate change.

“This is part of a concerted multi-year campaign of misinformation,” Meierling said. “They have some really creative counting.”

Many of the companies that left ALEC did so in 2012 over the group’s stance on two unpopular issues, he said. Several large firms left over the group’s promotion of voter ID laws and “stand your ground” gun laws.

Meierling couldn’t offer a tally on how many companies have come and gone since activists rolled out their climate change campaign, however he disputes the claim that 120 have left. In fact, ALEC has added 33 new stakeholder groups this year, according to him.

Meierling wouldn’t disclose which stakeholders have joined ALEC because he said he doesn’t want them being persecuted.

ALEC opposes subsides to bolster solar and wind companies, but the group is also against subsidies for oil companies, he said.

“As a policy organization, we are opposed to mandates and subsides of all types,” Meierling said. “We don’t believe the government should pick winners and losers. It’s unfortunate that there are so many activists groups out there that they are able to coordinate and collaborate their message to make it seem like somehow we are evil.”

Making ALEC appear evil isn’t the goal, the goal is convincing the public and private world that the group is decidedly against taking action on climate change in its philosophies and actions, said Melinda Pierce, Sierra Club’s legislative director

“ALEC is a forum that has been active across state governments trying to block action on climate change,” Pierce said. “It’s led by climate deniers.”

As an example, she pointed to ALEC’s efforts to oppose the U.S. Environmental Protection Agency’s Clean Power Plan.

Meierling argues that the group isn’t opposed to the entire plan, but portions of it, and he took issue with ALEC being portrayed as the “lone wolf” in its opposition to the Obama Administration-backed plan.

“We’re not alone,” Meierling said.

According to him, many of the state legislators on ALEC’s board are against portions of the plan, and he noted that at least 20 state attorney generals have opposed the plan.

Several attorney generals this month filed suit to challenge the EPA’s rules designed to cut greenhouse gas emissions from U.S. power plants, arguing the plan is an “overreach” of federal government powers.

ALEC’s objections to current climate change policymaking center around economic concerns, and how such plans will be implemented, Meierling said.

Sierra Club’s Pierce has a problem with the group acknowledging climate change and opposing efforts like the Clean Power Plan.

“So they believe in climate change yet they still push to block action in states?” Pierce said. “They still pass out model legislation on how to prevent clean energy. It just doesn’t seem to make sense to me.”

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