Louisiana State Treasurer John Fleming, M.D., today expressed strong support for a multistate coalition of attorneys general who have raised concerns with major credit rating agencies regarding the use of environmental, social, and governance (ESG) criteria in determining creditworthiness.
On April 22, 2026, a group of 23 state attorneys general signed a letter that was delivered to executives at Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings, criticizing their increasing incorporation of ESG factors into downgrades of fossil-fuel companies or sectors. These actions have undermined objective financial analysis and harmed state economies.
The letter argues that ESG-driven methodologies rely on “highly speculative” assumptions that could artificially affect bond ratings, particularly for energy-producing states, and raises concerns about potential conflicts of interest in ESG-related consulting services.
Treasurer Fleming noted that as Louisiana’s chief financial officer, “My responsibility is to safeguard the fiscal integrity of our state and ensure that our creditworthiness is evaluated based on sound financial fundamentals, not political or ideological criteria. The concerns raised by 23 of our nation’s attorneys general are both valid and urgent.”
Dr. Fleming emphasized that Louisiana’s economy, like many energy-producing states, could be negatively impacted if credit rating agencies penalize industries critical to state revenues and employment.
Treasurer Fleming believes that “Credit ratings should reflect a state’s ability to meet its financial obligations, but when outside entities inject subjective ESG considerations into that process, they risk distorting the market, increasing borrowing costs, and ultimately placing an unfair burden on taxpayers.”
The letter also raises legal questions about whether coordinated ESG commitments among rating agencies, such as participation in international initiatives, could violate antitrust laws or state consumer protection statutes.
Dr. Fleming reaffirmed Louisiana’s commitment to transparent, market-based financial practices and pledged to continue working with state and national partners to ensure fairness in the municipal bond market. He pledged to “Stand with this coalition in calling for accountability, transparency, and adherence to the rule of law.”
“It is essential that states are not disadvantaged by politically motivated frameworks that fall outside the proper scope of credit analysis,” said Treasurer Fleming.
Loading ...