Attorneys General Push Back Against Senators Who Protect Fossil Fuel Industry

November 22, 2022 by Tom Ramstack
Attorneys General Push Back Against Senators Who Protect Fossil Fuel Industry

WASHINGTON — A blame game like the one that marked the COP27 international climate change conference continued this week in Washington between Democratic attorneys general and Senate Republicans.

Attorneys general from 16 states and the District of Columbia fought back Monday against warnings from Senate Republicans who told major law firms to avoid getting too pushy with promoting socially conscious investing to their clients.

The senators wrote letters to major law firms earlier this month threatening a congressional investigation into lawyers who advocate for ESG investment.

ESG stands for environmental, social and governance. It refers to an investment strategy that screens investments based on corporate policies and that encourages companies to act responsibly.


The strategy generally recommends staying away from investments in the coal, oil and gas industries.

Senate Republicans are concerned that aggressive promotion of the investment strategy by law firms could hurt the fossil fuel energy industries, perhaps eventually raising prices for consumers as the businesses struggle for profitability.

Similar disputes persisted throughout the United Nations’ COP27 climate change conference in Egypt that ended Sunday.

Industrialized and poorer nations argued they have no practical alternatives to fossil fuels. More expensive renewable energy and the environmental cleanup advocated at COP27 would drive major industries out of business and their countries into economic collapse, they said.

Environmentalists said the worldwide consequences of global warming mean a failure to follow climate friendly policies was irresponsible and dangerous.

The Democratic attorneys general made the same kind of arguments in letters to the heads of the Senate Banking Committee and the House Financial Services Committee. They said ESG represents sensible investing.

“For over twenty years, the finance industry has understood — and studies have confirmed — that consideration of ESG factors yields important information about risks and rewards, which leads to greater value for beneficiaries,” the attorneys’ general letter says. 

“Companies that fail to take climate-change risks into account, for example, can suffer serious financial consequences, both in terms of physical damage and litigation and regulatory costs.”


In an example this month, Kirkland & Ellis advised Blue Source Sustainable Forests Co. on a $1.8 billion acquisition of properties managed by The Forestland Group, which owns 1.7 million acres of timberland.

Blue Source is committed to prioritizing climate mitigation in its forestry enterprises. The deal will allow Blue Source to sequester hundreds of millions of tons of carbon dioxide through sustainable forestry management, according to Kirkland & Ellis.

A senator who expressed concern that law firms and investment firms were going too far in thwarting the fossil fuel industry was Pat Toomey, R-Pa. He recently has been seeking information from investor research firms about how they calculate companies’ ESG scores.

One of the firms, New York-based BlackRock Inc., was told by Republican senators its support for ESG could threaten the financial security of public pensions.

The 51 law firms that received the Senate Republicans’ letters of concern included some of the nation’s largest, such as DLA Piper, Covington & Burling LLP and WilmerHale.

The letter said ESG could be considered an attempt “to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box.”

“Of particular concern is the collusive effort to restrict the supply of coal, oil, and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad,” the senators wrote.

District of Columbia Attorney General Karl Racine accused the Republican politicians of “kowtowing to the demands of a small group of corporate donors” by “engaging in a dangerous misinformation campaign to influence how investment decisions are made.”

He said ESG investment could be a wise decision.

“Thoroughly considering all potential risks before making investment decisions is a fundamental principle of capitalism,” Racine said in a statement.


Several law firms that received the senators’ letters declined to comment to The Well News.

Tom can be reached at [email protected] or on Twitter @tramstack.

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November 22, 2022
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Attorneys General Push Back Against Senators Who Protect Fossil Fuel Industry

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