A coalition of 23 U.S. state attorneys general, led by Iowa AG Brenna Bird, has issued a letter to the Science Based Targets initiative (SBTi), expressing serious legal concerns about […]

A coalition of 23 U.S. state attorneys general, led by Iowa AG Brenna Bird, has issued a letter to the Science Based Targets initiative (SBTi), expressing serious legal concerns about its Financial Institutions Net-Zero (FINZ) Standard. The coalition argues that the new guidelines could violate both federal and state antitrust laws as well as consumer protection statutes.

The FINZ Standard, released in late July, sets stringent requirements for financial institutions to align with net-zero targets. Among the provisions are calls to phase out financing and insurance for fossil fuel projects, enhance fossil-fuel-related disclosures, and adopt emissions-reduction mandates across portfolios. According to the AGs, if enforced through aligned industry participation, these collective actions could amount to unlawful collusion or a boycott of fossil fuel-related industries.

The attorneys general also warn of potential greenwashing, stating that unrealistic or unachievable emissions targets, especially if marketed without adequate disclaimers, could mislead investors and consumers. They contend that financial institutions promoting such goals without fully disclosing their feasibility or impact may be engaging in deceptive practices.

The letter demands detailed documentation from SBTi, including internal communications, criteria used to formulate the FINZ Standard, the identities of participating insurers, and any influence the initiative may have on underwriting decisions. It also seeks transparency about funding sources and the extent to which corporate members are expected to comply with SBTi policies.

AG Bird characterized the initiative as an attempt to push “radical environmentalism” onto financial institutions, warning that such standards could undermine energy independence, raise food and fuel costs, and harm local economies. Florida AG James Uthmeier has launched a parallel investigation into SBTi and CDP, probing potential coercion of companies into revealing proprietary data under the guise of environmental transparency.

Although it is not a formal legal action, the letter sets a firm deadline of September 8, 2025, for a comprehensive response, signaling increasing scrutiny of ESG frameworks and their influence on market behavior.

Source:

https://www.esgtoday.com/23-state-coalition-warns-sbti-financial-firms-over-antitrust-risk-from-net-zero-commitments/