Twenty-three state Republican attorneys general sent a letter to Fitch, S&P, and Moody’s for downgrading fossil fuel companies over what they believe are flawed environmental, social, and governance (ESG) metrics.
The Republican attorneys general sent their letter as the three ratings agencies downgraded fossil fuel companies based on what they believe are “highly speculative ESG predictions and goals.”
They wrote:
The Downgrades materially contravened the Ratings Agencies’ stated methodologies and are consistent with undisclosed material conflicts of interest, including the fact that (1) 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,” and (2) Moody’s and S&P pledged to help “achieve” net zero. The Ratings Agencies have used the same flawed methodologies to downgrade, or to threaten to downgrade, states and municipalities with fossil-fuel production revenues. The Ratings Agencies’ actions in creating and maintaining the Downgrades implicate federal laws related to their obligations as SEC-registered ratings organizations to follow stated methodologies and avoid conflicts, and also implicate state consumer protection laws that prohibit misrepresentations and omissions. These failures ripple throughout the economy, reducing fossil-fuel production and contributing to the current high gas prices facing consumers. [Emphasis added]
The attorneys general wrote that Moody’s and Standard and Poor’s (S&P) joined the Net Zero Financial Service Providers Alliance, an organization that the attorneys general have warned would violate antitrust laws and would require drastic emissions cuts.
“Because net zero requires fossil-fuel consumption to be slashed by over 70 percent between 2022 and 2050, Moody’s and S&P were pledging to use their ratings to increase the cost of capital for fossil-fuel companies and decrease investment in those companies. Both of those effects would reduce fossil-fuel production,” the attorney general contended.
The attorneys general said that the ratings agencies have made many incorrect predictions about the state of ESG, which includes:
The Ratings Agencies’ incorrect predictions include: (a) stricter policy and regulations by governments, but governments have moved away from or not enacted net-zero policies; (b) an accelerating “peak hydrocarbon” date leading to “stranded assets,” but the IEA now says oil and gas demand will continue to rise through 2050 and coal will remain the leading source of electricity through 2040; (c) renewable energy taking fossil-fuel market share, but governments are reducing subsidies, and automakers have written off over $70 billion in electric vehicle investments; and (d) increased ESG investment mandates, but net-zero alliances have collapsed, ESG funds are experiencing net outflows, and the traditional energy sector is outperforming the broader market by the biggest margin in history.
Given many of the issues they laid out in their letter to the ratings agencies, they demanded the agencies explain the reason for downgrading these energy producers, withdraw or disclose their ESG-related commitments, revise their sector-specific methodologies, eliminate or disclose ESG consulting conflicts, and certify internal controls review.
“The Ratings Agencies’ Downgrades were largely premised on far-fetched ESG goals that have not materialized. The Downgrades violated stated methodologies and reflected undisclosed material conflicts of interest, implicating SEC rules and state consumer protection laws,” they concluded in their letter. “The Ratings Agencies also have harmed states with fossil-fuel production, including by using similarly flawed methodologies to create the State Downgrades. The combined settlements for the Ratings Agencies’ prior methodological failures exceeded $2.3 billion, and the legal theories supporting enforcement here are at least as strong.”
State attorneys general that have signed onto the letter include:
Alabama
Alaska (LEAD)
Arkansas
Florida (LEAD)
Georgia
Idaho
Indiana
Iowa
Kansas
Kentucky
Louisiana
Mississippi
Missouri
Montana
Nebraska (LEAD)
North Dakota
Ohio
Oklahoma
South Carolina
Texas (LEAD)
Utah
West Virginia
Wyoming
Energy groups and consumer advocates echoed the sentiments of the attorneys general.
Will Hild, the executive director of Consumers’ Research, said in a statement to Breitbart News:
Ratings agencies like Fitch, Moody’s, and S&P should be providing objective financial analysis for consumers and investors to rely on, not using their market power to push woke ideology. As the state Attorneys General expose in this letter, these ratings groups have been weaponizing their credit ratings in an effort to push a radical ESG agenda. Instead of providing analysis through the lens of fiduciary duty and financial prosperity, these woke activists are colluding with UN-backed climate activists and using flawed methodologies to meet arbitrary net-zero and ESG goals. Thanks to leadership by the AGs, the depths of collusion by the woke cartel continues to be exposed. Consumers’ Research will continue to support elected officials who are ensuring consumers are protected from woke activists.
Michael Lucci, the founder, CEO, and chairman of State Armor, said in a statement:
It is absurd that ratings agencies claim to measure environmental, social, and governance performance while awarding stronger marks to a CCP-owned company tied to an authoritarian regime with a well-documented human-rights record than to major U.S. energy firms. That contradiction becomes even more glaring when China has expanded coal capacity at a pace exceeding much of the rest of the world combined, undermining any serious claim that these scores are rooted in consistent environmental standards. Outcomes this detached from reality underscore why the entire ESG ratings system deserves every ounce of scrutiny it gets.
Jason Isaac, the CEO of the American Energy Institute, said, “The allegations confirm what many have warned for years: ESG is not about risk assessment, it is about reshaping markets through financial coercion. Credit rating agencies appear to have abandoned objective, data-driven analysis in favor of speculative, politically aligned assumptions that penalize reliable American energy while rewarding favored industries.”
He added, “That kind of distortion doesn’t just mislead investors, it raises costs for states, undermines domestic production, and ultimately hits consumers with higher prices. If these claims hold, regulators and attorneys general should treat this as a serious breach of trust and restore integrity to the ratings process.”
A 2025 poll found that 56 percent of Americans agree that “ESG is a highly subjective, politically charged idea that is forcing progressive policies on everyday Americans resulting in higher prices for nearly everything.”
