Louisiana Attorney General Liz Murrill
BATON ROUGE – Louisiana Attorney General Liz Murrill has joined a coalition of 23 state AGs in questioning the lawfulness of the environmental, social and governance (“ESG”) policies of three top credit rating agencies.
The agencies — Fitch Ratings, Moody’s and S&P Global Ratings — have pledged to systematically incorporate ESG considerations into credit ratings. In considering highly speculative ESG predictions and goals, the AGs say the agencies have downgraded the credit ratings of fossil-fuel companies, and their policies threaten to undermine the States’ bond ratings as well.
“Louisiana families expect decisions that are grounded in reality, not driven by political agendas or outside pressure,” Murrill said in a statement. “Financial institutions should focus on responsible risk assessment, transparency, and delivering value, not advancing ideological priorities that distort the market and sideline accountability to the public.”
The April 22 letter raises a number of concerns with the ratings agencies’ policies and practices. Among them, the letter notes that while the ratings agencies’ methodology pushes companies to prioritize ESG factors, they are also artificially increasing demand for their suite of ESG-related consulting services.
This, the states argue, is likely an undisclosed and unlawful material conflict of interest. The letter also questions whether the ratings agencies’ ESG policies constitute an antitrust violation or otherwise violate the states’ laws that ban unfair and deceptive trade practices.
Nebraska AG Mike Hilgers co-led the coalition of AGs.
“Today’s letter is our latest effort to push back against those who are unelected but want to force their unpopular policies on the public,” Hilgers said. “Credit worthiness should be based on market forces and sound accounting, not the political projects and unfeasible ideas of a few powerful people that are not accountable to voters.”
Joining Hilgers in co-leading the letter are the attorneys general of Alaska, Florida and Texas. And in addition to Murrill, the letter was also joined by the AGs of Alabama, Arkansas, Georgia, Idaho, Iowa, Indiana, Kansas, Kentucky, Mississippi, Missouri, Montana, North Dakota, Ohio, Oklahoma, South Carolina, Utah, West Virginia and Wyoming.
