{"id":10827,"date":"2026-10-21T19:55:24","date_gmt":"2026-10-21T19:55:24","guid":{"rendered":"https:\/\/radio406.org\/?p=10827"},"modified":"2026-10-18T19:56:43","modified_gmt":"2026-10-18T19:56:43","slug":"financial-officers-warn-rating-agencies-about-using-esg-in-state-credit-ratings","status":"publish","type":"post","link":"https:\/\/radio406.org\/?p=10827","title":{"rendered":"Financial officers warn rating agencies about using ESG in state credit ratings"},"content":{"rendered":"

(The Center Square) \u2013 Twenty-two financial officers from across the U.S. wrote to the nation\u2019s top rating agencies \u2013 Moody\u2019s, Fitch, and S&P \u2013 asking them to explain the influence ESG policies have had on states\u2019 credit ratings, with the officers detailing what they consider the harm using such \u201cpolitical assumptions\u201d causes to states and taxpayers alike.<\/p>\n

The officers also said the agencies have a double standard when it comes to ESG downgrades for American oil and gas companies and not for China. ESG stands for environmental, social governance.<\/p>\n

One of the officials involved in the letter \u2013 Utah State Treasurer Marlo Oaks \u2013 told The Center Square that \u201ccredit ratings should be grounded in objective, consistent financial analysis, not political assumptions about the future.\u201d<\/p>\n

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“Our concerns about subjective ESG criteria influencing state and local credit ratings date back several years,\u201d Oaks said.<\/p>\n

Oaks noted he appreciates S&P \u201ctaking those concerns seriously and discontinuing its ESG credit indicators,\u201d calling this action \u201can important step.\u201d<\/p>\n

\u201cBut the underlying problem remains,\u201d Oaks said. \u201cRatings agencies continue to incorporate speculative \u2018transition risk\u2019 and \u2018physical risk\u2019 assumptions into credit decisions, potentially increasing borrowing costs and harming taxpayers based on politically contingent predictions that have failed to materialize or have been retracted.\u201d<\/p>\n

The state financial officers wrote in their letter<\/a><\/strong> that ratings agencies\u2019 credit ratings\u2019 reliance on \u201cfalse ESG predictions of \u2018transition risk\u2019 and retracted predictions of \u2018physical risk\u2019\u201d harms states \u201cby leading to unwarranted downgrades of their bonds, as well as decreasing the value of States\u2019 shares in downgraded companies.\u201d<\/p>\n

Ratings agencies have \u201cdowngraded oil and gas companies and upgraded companies embracing ESG\u201d based on supposed risks, the letter said.<\/p>\n

However, the agencies\u2019 ESG predictions about transition risk have been proven wrong, and physical risk predictions cite retracted information, according to the officials.<\/p>\n

The officials also pointed out the double standard of ESG downgrades when it comes to China.<\/p>\n

For example, S&P downgraded \u201cthe oil and gas sector and American oil and gas companies based on ESG risks\u201d while it reaffirmed \u201cits A+ rating for two Chinese state-owned oil and gas companies,\u201d even though these Chinese companies \u201care worse by every objective ESG metric,\u201d the letter said.<\/p>\n

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\u201cSimilarly, Fitch has indicated no ESG risk for Chinese state-owned companies,\u201d the letter said.<\/p>\n

In their letter, the officers called for a reversal of downgrades based on false ESG predictions, as well as for ratings agencies to explain the influence ESG policies have had on states\u2019 credit ratings.<\/p>\n

The Center Square reached out to Fitch, Moody\u2019s and S&P twice each individually for comment. None have responded by publishing.<\/p>\n

CEO of State Financial Officers Foundation OJ Oleka told The Center Square that the financial officers\u2019 \u201cimportant letter puts the nation\u2019s top credit rating agencies on notice for playing political games at the expense of everyday Americans, and it also gives them an opportunity to once again do what they were designed to do.\u201d<\/p>\n

\u201cS&P, Moody\u2019s and Fitch can be respected sources of objective financial analysis, or they can be activists for an outdated ideological agenda, but they cannot be both,\u201d Oleka said.<\/p>\n

\u201cWhen false ESG predictions are used to weaken a state’s credit rating, as we’ve seen happen, the financial security of millions of public employees is threatened,\u201d Oleka said.<\/p>\n

Will Hild, executive director of consumer advocacy organization Consumers\u2019 Research, told The Center Square that \u201cfactoring ESG in credit ratings is what forced American car makers and energy companies to turn their backs on their loyal customers in pursuit of net-zero insanity, which made things more expensive for all Americans.<\/p>\n

\u201cThe very fact that so-called ‘ESG risk’ resulted in some American companies getting downgraded while Chinese state-owned companies received high ratings should be enough to discredit this absurd metric permanently,\u201d Hild said.<\/p>\n

\u201cNo credit rating agency should base scores on ESG, period,\u201d Hild said.<\/p>\n

The state financial officers also sent their letter to the U.S. Securities and Exchange Commission, which has not yet responded to The Center Square\u2019s request for comment.<\/p>\n

Those signing the letter include Arizona Treasurer Kimberly Yee, Arkansas Auditor Dennis Milligan, Indiana Comptroller Elise Nieshalla, Indiana Treasurer Daniel Elliott, Kansas Treasurer Steven Johnson, Kentucky Auditor Allison Ball, Kentucky Treasurer Mark Metcalf, Louisiana Treasurer John Fleming, Mississippi Treasurer David McRae, Missouri Auditor Scott Fitzpatrick, Missouri Treasurer Vivek Malek, Nebraska Auditor Mike Foley, Nebraska Treasurer Joey Spellerberg, North Carolina Auditor Dave Boliek, North Dakota Treasurer Thomas Beadle, Ohio Treasurer Robert Sprague, Oklahoma Treasurer Todd Russ, Pennsylvania Treasurer Stacy Garrity, South Carolina Treasurer Curtis Loftis, Utah Auditor Tina Cannon, Utah Treasurer Marlo Oaks and West Virginia Treasurer Larry Pack<\/p>\n

By Tate Rosentreter | The Center Square contributor<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

(The Center Square) \u2013 Twenty-two financial officers from across the U.S. wrote to the nation\u2019s top rating agencies \u2013 Moody\u2019s, Fitch, and S&P \u2013 asking them to explain the influence ESG policies have had on states\u2019 credit ratings, with the officers detailing what they consider the harm using such \u201cpolitical ...<\/p>\n","protected":false},"author":1,"featured_media":10828,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[578],"tags":[],"class_list":["post-10827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national"],"_links":{"self":[{"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/posts\/10827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/radio406.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10827"}],"version-history":[{"count":1,"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/posts\/10827\/revisions"}],"predecessor-version":[{"id":10829,"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/posts\/10827\/revisions\/10829"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/radio406.org\/index.php?rest_route=\/wp\/v2\/media\/10828"}],"wp:attachment":[{"href":"https:\/\/radio406.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radio406.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radio406.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}