Last week, attorneys general from 21 states sent asset managers at 53 financial institutions one of those legal-seeming letters meant to scare people when the person sending them doesn't actually have a case. It's the latest move in the robustly-funded, now years-long campaign to make Wall Street deny the impacts of climate change and pretend fossil fuel companies are still good investments, even though the long-term profitability of the fossil fuel industry is in direct conflict with the long-term sustainability of human civilization on this planet.
Montana AG Austin Knudsen told Fox's Thomas Catenacci that "this ESG nonsense is filtering into a lot of our states and the way they're doing it is really, really concerning and probably flagrantly illegal." Now, for honest people, if something is "flagrantly illegal" then, by definition of the word "flagrant," you wouldn't need to couch that with "probably."
But we're not exactly dealing with honest people. We're dealing with Republicans who are working on behalf of their fossil-fueled donors, among others. Of the 21 AGs, four were appointed, so they didn't have to run a campaign, but the remaining 17 received a combined $9,016,074 from the energy and natural resources industry during their political careers, according to public records. For example, Lousiana AG Jeff Landry has run five campaigns since 2007, and his biggest sectoral contributor was the Energy and Natural Resources industry, which has given him over $1 million. But that's just a quarter of what Texas AG Ken Paxton has raised: Between his Texas state House, Senate, and AG campaigns, Paxton has received at least $4,274,012 in contributions from the energy and related industries.
They're not just going after the environmental issues, though, as social and governance investing guidelines are also a problem for them. For example, one of the signatories is Kansas Attorney General Kris Kobach, who took thousands of dollars from white nationalists and recently resigned from the We Build the Wall organization that was indicted for money laundering, conspiracy, and fraud. In other words, a guy who racists love and who poorly governed a fraudulent organization has a problem with social justice and good governance. It’s not exactly a mystery as to why he'd target ESG investing with his state power!
That’s not to say that a close examination is required to see through the AGs' disinformation; it only takes until page three before they prove their dishonesty. The Republican AGs attempt to argue that membership in the Net Zero Asset Managers Initiative is "inconsistent" with their "clients' financial interests":
“Perhaps most shockingly, NZAM members have committed to ‘challenge’ and ‘seek to overcome’ the ‘constraints [they] face,’ which in context appears to include ‘legal duties to clients’ and ‘applicable law’ to achieve net zero by 2050.”
The first flag that the AGs don't actually have a strong legal argument and are up to something nefarious is the fact that they use the word "appears" in that sentence. Similar to Knudsen's "probably flagrantly illegal" allegation, this is a classic legal bit of flimflammery that allows them to present an obvious misrepresentation as a legitimate misreading.
And sure enough, if one were to follow through to the source of the AGs’ quote-mined passage, it turns out the NZAM commitment does the exact opposite of what the AGs allege. It doesn't require signatories to challenge the law; it states that the commitments are made "in the context of our legal duties to clients and unless otherwise prohibited by applicable law."
The Republican AGs allege that ESG commitments don't follow the law, and the best they can do to justify that claim is misrepresent a commitment to follow the law.
The letter goes on for another 17 pages, but if by page three the AGs are already obviously and intentionally misrepresenting the primary sources that supposedly justify their most bombastic yet baseless claim, why bother taking the rest of it at face value?