Freedom to Invest applauds a coalition of state attorneys general for pushing back today against pressure from their peers on America’s three largest rating agencies over their responsible practice of factoring climate and transition-related financial risks into decisions. In a letter sent to the U.S. Securities and Exchange Commission today, 20 attorneys general responded to a threatening letter from 23 other attorneys general, urging these agencies to bow to political pressure rather than their own independent judgment.
Andrew Collier, senior director of Freedom to Invest, added:
For the last several years, some state attorneys general have used the power of their office to intimidate, pressure, and harm investors and companies over their consideration of climate risks in decisions – overriding free-market decision-making in the process. These efforts, most recently compounded by a threatening letter to ratings agencies, are intended to force the hands of others through political pressure to achieve their end objectives. Today's announcement from a coalition of state attorneys general pushing back against these intimidation efforts was a breath of fresh air.
Climate risk is a financial risk, and markets work best when investors, companies, and independent rating agencies are free to make their own risk assessments without government interference. Investors, companies, banks, ratings agencies, and insurance providers should be able to assess all material financial risks when making decisions, including risks associated with extreme weather events. The original attempt by some state attorneys general to pressure ratings agencies to abandon their practice of considering the financial impacts of climate-related risks in their ratings and assessments not only violates federal law but is also unethical. Freedom to Invest applauds the signatories of today's letter for speaking up when their peers bring politics before the law of our land.
About Freedom to Invest
Freedom to Invest supports investors and companies in protecting their long-standing rights to invest, operate, and engage responsibly. The initiative rallies free market voices to remind policymakers that the economy will be stronger and more resilient if investors can make their own investment decisions and engage companies directly on relevant financial issues, without government coercion. Learn more: www.freedomtoinvest.org.