Nearly two dozen states have demanded that insurance companies provide them with documents and communications concerning commitments to limit the use of fossil fuels to curb climate change.
Utah Attorney General Sean Reyes and Louisiana Attorney General Jeff Landry led 21 other attorneys general in a Tuesday letter to 28 insurance companies that are members of the United Nations-backed Net-Zero Insurance Alliance and Net-Zero Asset Owner Alliance.
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The attorneys general are seeking records from the companies to establish their relationship with the two organizations and the commitments they may have made. They argue that the alliances could violate antitrust laws as they push companies to align with the Paris Agreement, an international treaty intended to mitigate the effects of climate change.
The letter is the latest in a nationwide Republican effort to push back against corporate environmental, social, and governance initiatives, known as ESG.
“The ESG movement has spread to every corner of the world’s financial and energy sectors, and unsuspecting Americans are paying the price,” said Reyes. “Insurers have an obligation to protect the interests of their clients, not advance a radical environmental agenda. Utah is taking a stand against these efforts to stop the increased prices and other harms these horizontal agreements will cause.”
The nine-page letter raised “serious concerns” about the insurance companies’ relationships with the alliances and the potential commitments made to them. They pointed out that under U.S. antitrust law, “certain arrangements among business competitors are strictly forbidden because they are unfair or unreasonably harmful to competition.
“Likewise, collective agreements to fix prices or ‘restrict production, sales, or output’ are illegal,” the letter reads. “This restriction extends to agreements among competitors to issue uniform pricing policies, conditions of sale, production quotas, or otherwise limit the identity of their customers if those agreements will ultimately raise prices.”
Some large financial institutions have reconsidered their membership in climate-focused alliances over fears that they could create legal liabilities.
GOP attorneys general and state treasurers have made a concerted effort to constrain the ESG movement, and the pushback has morphed into a political issue, with political figures countering ESG principles as part of a broader opposition to “wokeness.”
For instance, Oklahoma’s treasurer announced this month that the state will stop doing business with more than a dozen financial firms over accusations that they “boycott” the energy industry.
Treasurer Todd Russ emphasized that the blacklisted firms will end up losing access to billions of dollars from government entities as a result of the judgment. The move comes after the state sent out questionnaires to dozens of companies in an effort to inform the list.
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President Joe Biden’s first veto of his presidency also involved ESG.
Congress had passed a resolution to cancel a Biden-era Labor Department rule that allows retirement plan managers to weigh ESG factors when making investments. Biden’s veto killed the measure as lawmakers didn’t have enough support to override it.