Iowa Attorney General Brenna Bird spoke on “Iowa Press” Aug. 30, 2024. (Photo courtesy of Iowa PBS)
Iowa Attorney General Brenna Bird led a multistate letter Friday questioning whether a new net-zero carbon emissions standard for businesses is illegal under state and federal law.
The letter was sent to David Kennedy, CEO of the Science Based Targets initiative (SBTi), a group that recently released its Financial Institutions Net-Zero standard.
This standard is meant to aid financial institutions “in addressing their most significant climate impact through alignment and sector-specific targets,” according to the document, through actions like stopping or limiting investments in new projects related to fossil fuel expansion and addressing deforestation risks in existing investments.
This standard could run afoul of state and federal laws limiting ESG investment strategies — practices where investment firms account for “environmental, social and governance factors” when making investments, according to Bird’s letter.
According to the law firm Morgan Lewis, there were 20 states with “anti-ESG” rules in effect as of September 2023.
South Carolina joined the list in February 2024, when Gov. Henry McMaster signed the ESG Pension Protection Act.
Bird also wrote SBTi and the businesses that commit to following the standard may be in violation of state consumer protection laws and federal and state antitrust laws, constituting an illegal boycott by deliberately cutting off investment and insurance for certain industries through their standard on oil, gas, and coal expansion.
“Some economic arrangements are illegal because they are unfair or unreasonably harmful to competition; the ‘good intentions’ behind them are irrelevant,” Bird wrote.
The letter was co-signed by attorneys general from 22 other states — Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, and Wyoming.
It included a list of requested information and documents from SBTi on its communication with members about how it plans to meet net-zero carbon emission commitments, how the standard was developed, and how it is working with insurance companies to reduce emissions.
In a news release Friday, Bird called the standard from SBTi, which partners with the United Nations, the World Wide Fund for Nature and other organizations in providing advisory information, “the next attempt by radical environmentalists to coordinate companies to squeeze important American industries into eliminating carbon dioxide production by some future date.”
“SBTi is trying to redo President Biden’s radical green scheme,” Bird said in a statement. “If successful, they’ll hurt farmers, energy producers, and Iowans. Its program limits output of goods or services, and these unrealistic net-zero programs harm both American agriculture and industry. Making net-zero a goal actively harms Americans, creates risk for energy independence, and increases the cost of safe, healthy, nutritious food.”
Florida Attorney General James Uthmeier also took steps to investigate SBTi last week, announcing he would issue subpoenas to the advisory group and the CDP, an international nonprofit focused on environmental impact reporting.
The investigation will look into whether these organizations violated state consumer protection and antitrust laws “by coercing companies into disclosing proprietary data and paying for access under the guise of environmental transparency,” according to a news release.
“Radical climate activists have hijacked corporate governance and weaponized it against the free market,” Uthmeier said in a statement. “Florida will not sit back while international pressure groups shake down American companies to fund their ESG grift. We’re using every tool of the law to stop the Climate Cartel from exploiting businesses and misleading consumers.”
South Carolina’s anti-ESG law requires the Retirement System Investment Commission to make investment decisions based only on “pecuniary factors” — in other words, what’s expected to net the most money — without giving weight to policies such as climate change and social impacts. During a public hearing, the commission’s CEO told legislators nothing would change, since the agency already operated that way.
SC Daily Gazette Editor Seanna Adcox contributed to this report.
Like the SC Daily Gazette, Iowa Capital Dispatch is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: [email protected].
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