AGs Demand SEC Investigate Credit Rating Agencies Over ESG Practices
1 report, 1 independent
Updated Fri 00:00
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What happened
Attorneys General, led by Austin Knudsen of Montana, demanded the Securities and Exchange Commission investigate Moody's Corporation, Fitch Ratings, Inc., and S&P Global Ratings. The demand stems from accusations that the agencies downgraded fossil fuel companies, industries, states, or municipalities based on speculative ESG predictions. These agencies are nationally recognized statistical rating organizations.
Why it matters
Credit ratings assess a borrower’s ability to repay debts, meaning a downgrade can increase borrowing costs and make bonds less attractive to some investors. The scrutiny targets the integrity of the ESG predictions used by these major rating agencies.
Who's involved
- Moody's CorporationOne of the credit rating agencies facing scrutiny over its ESG methodology.
- Austin KnudsenLed the group of Attorneys General demanding the SEC investigation.
- Securities and Exchange CommissionThe government agency being asked to investigate the rating agencies.
- S&P GlobalOne of the three credit rating agencies accused of flawed ESG predictions.
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The entities involved
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Moody's Corporation
company
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Securities and Exchange Commission
government agency of the Philippines