22 state AGs alert SEC of rating agencies’ ESG promotion
Attorneys general from 22 states sent a letter to the U.S. Securities & Exchange Commission detailing how multiple ratings agencies such as Moody’s Corporation, Fitch Ratings and S&P Global Ratings still push an ESG agenda, months after a group of state attorneys general called on them to explain ESG-driven downgrades.
Executive director of Consumers’ Research Will Hild told The Center Square that “these woke ratings agencies continue to push ESG policies and blatantly ignored calls for the removal of woke ideology from their business practices.
“Instead of providing legitimate financial analysis for its customers, they continue to rely on ESG-driven metrics, even after they have proven to be implausible,” Hild said.
Montana Attorney General Austin Knudsen led the coalition of 21 other state attorneys general in the letter they sent to the U.S. Securities & Exchange Commission (SEC).
When reached for comment, Knudsen’s media relations referred The Center Square to a news release from the Attorney General’s Office concerning the letter.
The attorneys general argue in their letter that Moody’s, Fitch and S&P Global “have engaged in various downgrades of fossil-fuel companies or sectors…based on highly speculative ESG predictions and goals.”
The state attorneys general say that the ESG-driven downgrades “materially contravened the Ratings Agencies’ stated methodologies and are consistent with undisclosed material conflicts of interest,” including the fact that “all three agencies have pledged to a United Nations-backed group that they will ‘incorporat[e] ESG into credit ratings and analysis in a systematic…way,’ as well as ‘Moody’s and S&P pledge to help ‘achieve’ net zero.’”
Neither Moody’s, Fitch, nor S&P have yet responded to The Center Square’s individual requests for comment.
The state attorneys general noted that “a report issued by Moody’s in August 2026 … demonstrates the Ratings Agencies’ continuing reliance on false ESG predictions.”
“In the Report, Moody’s estimates heat-and-water risks to industry in States based on an extreme climate scenario that was abandoned months earlier because of its implausibility – the Representative Concentration Pathway 8.5 scenario,” the letter said. “Moody’s website also cites … a $41 trillion damage estimate based not only on the implausible RCP 8.5 scenario, but also on a paper that was retracted due to serious errors.”
The 22 state attorneys general recommended that “the Ratings Agencies should explain or reverse ESG-driven downgrades; publish and follow sector-specific methodologies that either remove ESG transition-risk factors entirely or limit them to a defined, evidence-based time horizon; and either withdraw from ESG commitments and eliminate ESG consulting conflicts, or disclose ESG commitments and conflicts as material conflicts of interest.”
The state attorneys general that signed the letter hailed from Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming.
CEO of American Energy Institute Jason Isaac told The Center Square that “credit ratings should reflect financial reality, not an ESG agenda.
“When rating agencies rely on implausible climate scenarios and retracted studies to influence credit decisions, they undermine the integrity of the ratings investors depend on and can drive up the cost of capital for American energy producers,” Isaac said.
“The SEC should hold these agencies accountable to their own methodologies, require disclosure of conflicts of interest, and ensure ratings are based on sound evidence, not an ideological agenda,” Isaac said.
As The Center Square reported in April, 23 state attorneys general demanded that Moody’s, Fitch, and S&P explain their ESG-driven downgrades of fossil-fuel companies.
The SEC has not yet responded to The Center Square’s request for comment.
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