On Wednesday, 22 state financial officials from 17 states called on the country’s top credit rating firms—S&P Global Ratings, Moody’s, and Fitch Ratings—to explain what they describe as flawed ESG policies. The officials warned that these policies could endanger taxpayer funds, public pension investments, and the cost of state borrowing.
In a letter also sent to SEC Chairman Paul Atkins, the group charged that the agencies have let politically motivated climate assumptions shape their credit assessments. They noted that the issue matters financially for taxpayers, since a downgraded credit rating can raise government borrowing costs and hurt the performance of state pension portfolios.
According to the financial officers, Moody’s and S&P have kept citing a 2024 Nature study that forecast severe economic damage from climate change, even though the paper was retracted in 2025 after other researchers challenged it.
The officials also said the rating agencies continue to rely on other ESG forecasts that have not materialized, including predictions of a sharp drop in fossil fuel use. While the rate of growth in fossil fuel emissions has slowed, research has not shown a major decline in overall fossil fuel consumption.
It is good that state officials are persistent in pushing back against ratings agonies who rely on ESG and other questionable criteria to determine credit worthiness. This nonsense needs to come to an end yesterday.
PHOTO CREDIT: Pixabay
