California Attorney General Rob Bonta joined 20 state attorneys general in sending a letter to the Securities and Exchange Commission defending credit rating agencies' consideration of climate change in their financial assessments, according to the letter sent last week.
The response comes after Republican attorneys general sent a letter to the SEC on April 22 criticizing the three largest credit rating agencies for downgrading credit ratings of fossil fuel companies and fossil-fuel-dependent states based on climate risks.
In their response, Bonta and the allied state attorneys general argued that climate change poses substantial financial risks and that rating agencies must account for these factors. Over the past ten years, the U.S. has experienced 192 severe weather events with damages and costs totaling $1.5 trillion, they noted in the letter.
The Republican letter suggested that recent U.S. federal government policy changes mean energy transition risks are less important. The Democratic attorneys general disagreed, arguing that nearly all other countries continue pursuing emissions reductions and clean energy policies, and that California has not reversed course on climate action despite federal policy shifts.
California has implemented several climate initiatives including the 100 Percent Clean Energy Act, which targets 60% renewable energy procurement by 2030 and 100% by 2045; the Cap and Invest program, which imposes declining caps on greenhouse gas emissions; and the Low Carbon Fuel Standard, according to the state.
The allied attorneys general are from Colorado, Connecticut, the District of Columbia, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.