Attorney generals from 14 states are investigating the nation’s six largest banks on allegations they blocked credit to oil companies through their environmental, social, and governance (ESG) practices.
The attorneys general, all Republicans, sent civil investigative demands (CIDs) to JPMorgan Chase, Bank of America, Citi, Wells Fargo, Goldman Sachs and Morgan Stanley asking for information about their participation in the U.N.-backed Net-Zero Banking Alliance, a global climate initiative.
CIDs, similar to subpoenas, are legally-enforceable requests for information related to state or federal investigations.
The investigation is being led by Missouri Attorney General Eric Schmitt, who called the alliance “a massive worldwide agreement … to starve companies engaged in fossil fuel-related activities of credit on national and international markets.”
Schmitt alleged the alliance’s rules will keep farmers, oil leasing companies and other businesses vital to the economy from accessing loans.
“We are leading a coalition investigating banks for ceding authority to the U.N., which will only result in the killing of American companies that don’t subscribe to the woke, climate agenda,” Schmitt said. “These banks are accountable to American laws — we don’t let international bodies set the standards for our businesses.”
The Net-Zero Alliance was founded in April 2021 by 41 banks around the globe, including four U.S. banks — Bank of America, Citi, Morgan Stanley, and Amalgamated Bank. The alliance now spans 119 banks, including Goldman Sachs, Wells Fargo and JPMorgan, who signed on in October 2021.
Member banks promise to work toward net-zero carbon emissions within their lending and investment portfolios by 2050 or sooner, pledging interim goals by 2030. Hitting net-zero carbon emissions by 2050 is necessary to keep global warming at or below 1.5 degrees Celsius, according to the International Panel on Climate Change.
Member banks hold 40% of global banking assets, according to the alliance’s website.
Alongside Missouri, involved attorneys general represent Arizona, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Oklahoma, Tennessee, Texas and Virginia. Five other states are joining, according to Schmitt’s office, but can’t be named because of state confidentiality regulations.
The six banks did not return requests for comment by press time. JPMorgan and Citi declined to provide a comment on the matter to Law360.
The “radical climate change movement has been waging an all-out war against American energy for years, and the last thing Americans need right now are corporate activists helping the left bankrupt our fossil fuel industry,” Texas Attorney General Ken Paxton said in a prepared statement.
His state in August placed asset manager BlackRock on a “divestment” list requiring state pension funds to divest from companies seen as “boycotting” the fossil-fuel sector unless the firms defend their policies to the satisfaction of the state.
Other attorneys general mirrored Paxton’s sentiment.
“These banks appear to be colluding with the U.N. to destroy American companies that specialize in fossil fuels or otherwise depend on them for energy,” said Indiana Attorney General Todd Rokita. “They are pushing an investment strategy designed not to maximize financial returns but to impose a leftist social and economic agenda that cannot otherwise be implemented through the ballot box.”
Mississippi Attorney General Lynn Fitch said the alliance’s “political agenda does not align with American economic interests.”
Kentucky Attorney General Daniel Cameron said his state’s consumer protection and antitrust laws “prohibit companies from engaging in coordinated practices that block certain Kentucky businesses from accessing banking services.”
Wednesday's CIDs ask the banks to provide a laundry list of documents related to their alliance-related promises, the energy companies for which they provide banking services, and the companies they stopped serving to align with ESG goals.