In a victory for the State of Texas and consumers nationwide affected by financial companies prioritizing ideological “environmental, social, and corporate governance” (“ESG”) considerations over purely financial factors, S&P Global Ratings announced it would no longer publish new ESG credit indicators or update outstanding ESG credit indicators. This follows numerous efforts by Texas’s Office of the Attorney General (“OAG”) to combat the ESG investment doctrine that aims to weaponize the financial sector for ideological goals related to environmental extremism, racial and gender identity politics, and more. In September 2022, Texas and a coalition of states sent a Civil Investigative Demand (“CID”) to S&P Global requesting information relating to its incorporation of ESG factors into its credit ratings analysis.   

The OAG has launched several other initiatives to address the trend of financial companies behaving as an extension of politicians and activists by adopting ESG practices. In January 2023, Attorney General Ken Paxton launched a lawsuit against the Biden Administration’s illegal attempt to expose workers’ retirement accounts to ESG investing, putting their financial futures at risk by allowing asset managers to consider non-financial factors when investing client funds. The OAG has also launched aggressive defenses of Texas laws that forbid conducting State business with financial companies that discriminate against firearms businesses and the oil and gas industry.  

“In recent years, the financial industry has been pressured to use their enormous power over consumers to advance fringe causes that Americans do not agree with,” said First Assistant Attorney General Brent Webster. “Texas is proud of our litigation and investigations that have obviously caused companies to think twice about becoming an arm for political activism, and we will continue to monitor companies closely.” 

Read the September 2022 press release announcing the investigation here.  

Read the S&P Global Ratings announcement here.