Attorneys General Challenged Credit Agencies Over ESG Policies

State officials demanded federal oversight of climate modeling used by top credit rating agencies.

Updated on Sept. 24, 2026 in Economic Policy

Attorneys General Challenged Credit Agencies Over ESG Policies

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Should credit rating agencies incorporate environmental and social policies into their financial assessments?

A coalition of 23 Republican state attorneys general requested that federal regulators investigate Moody’s, Fitch, and S&P Global. The group claims these agencies are improperly incorporating ESG-linked climate assumptions into financial credit decisions.

Why it matters

State leaders argue that reliance on extreme climate scenarios and retracted academic research leads to distorted credit ratings for businesses and government entities. This action challenges the role of environmental modeling in formal financial assessments.

A report from Moody's projected potential global economic losses of $41.4 trillion by 2050, representing approximately 14.5% of global GDP. The accuracy of these estimates is now being contested by state officials citing retracted research.

The players

SEC Office of Credit Ratings

This federal office is responsible for the oversight and regulation of nationally recognized statistical rating organizations.

Moody's

This firm is a major global provider of credit ratings, research, and risk analysis for financial markets.

Fitch

Fitch is one of the three major credit rating agencies recognized by the SEC for evaluating financial risk.

S&P Global

S&P Global is a leading provider of financial information, analytics, and credit ratings for corporations and governments.

The details

The attorneys general coalition specifically cited concerns over Moody’s use of the RCP 8.5 emissions scenario and a 2024 Nature paper that was later retracted. They are calling on the SEC Office of Credit Ratings to scrutinize how these agencies utilize such models to evaluate financial risks.

A 2024 Nature paper was published and later retracted.
Moody’s released a report on heat and water stress in August 2026.
The letter to the SEC was documented on September 24, 2026.
Global economic loss projections are estimated through the year 2050.

Macro View

This move reflects an ongoing legal and political tension regarding the use of environmental, social, and governance metrics in the U.S. financial system. It follows a pattern of state-level efforts to curb ESG influence on national corporate governance standards.

For the average American, this dispute could signal future shifts in how municipal bonds and corporate debt are valued, potentially impacting local infrastructure funding. If regulators force changes to climate modeling, it may alter the borrowing costs for various state and local governments.

The takeaway

The conflict highlights a growing divide over the role of predictive climate modeling in assessing long-term financial stability. Investors and taxpayers should watch for potential regulatory changes that could redefine how climate risk is formally measured in the financial sector.