Virginia AG Warns the NZFPSA of Potential State and Federal Law Violations
Virginia’s attorney general led efforts to warn the Net Zero Financial Service Providers Alliance (NZFPSA) that some of its practices may violate state and federal law. In particular, the attorney general coalition expressed concerns that the NZFPSA’s goal to align its services and products to achieve net-zero greenhouse gas emissions, to implement the terms of the Paris Agreement, and to publicly report its collective efforts toward these goals could: (1) result in an artificial and potentially unlawful restraint of trade or commerce; (2) unlawfully mislead consumers and other persons about conflict of interest issues and the climate-related agenda’s viability; and (3) result in undue, widespread market manipulation with potentially detrimental effects. The AG coalition requested that the NZFPSA provide written responses to the coalition’s concerns.
Kentucky Challenges EPA’s Rule on Greenhouse Gas Emissions for Its Homegrown Coal-Fired Power Plants; California Supports It
Kentucky’s attorney general joined a challenge to the EPA’s proposed rule that would cut greenhouse gas emissions by several thousand metric tons (several million for certain gas types) from fossil-fuel-fired power plants through the next several years. The AG asserted that the EPA’s proposed rule would require Kentucky’s coal-fired power plants to either adopt potentially unreasonably expensive technologies or cease operation altogether due to the new emission standards. The AG noted that Kentucky’s coal plants generate a substantial amount of energy for the state and warned that the proposed rule may have a detrimental impact on the statewide, and then national, electric grid. The AG’s challenge comes after California’s attorney general joined efforts to support the proposed rule and advocated for standards that would help industries achieve the emissions standards more quickly.
JULY 2023 Arkansas AG Appoints Longtime Political and Legal Figure to ESG Oversight Committee to Help Determine Who Discriminates Based on ESG Factors
Arkansas’s attorney general appointed a longtime Arkansas political and legal figure to the state’s new ESG Oversight Committee, which was created “to determine a list of financial services providers that discriminate against energy, fossil fuel, firearms, or ammunition companies or otherwise refuse to deal based on environmental, social justice, and other governance-related factors.” If a company is included on the ESG Oversight Committee’s list, Arkansas must divest its direct and indirect holdings with the company and the state will be prohibited from investing its cash funds with the company. Arkansas’s treasurer will maintain the most updated list of companies that are violating Arkansas Act 411, the law that created the ESG Oversight Committee, on the official website.
North Carolina Attorney General Awards Nearly $700,000 in Grants to Support Environmental Efforts in North Carolina
North Carolina’s attorney general (AG) announced $685,327.21 in grants to various recipients, including Eastern Carolina University, the City of New Bern, and The Conservation Fund, to preserve natural resources and help support work to ensure clean air and water in eastern North Carolina. The grants were awarded through the Environmental Enhancement Grant program, which began as a collaboration between the North Carolina AG’s Office and Smithfield Foods. Smithfield provides $2 million to the state every year to fund environmental projects across North Carolina.
Attorneys General Petition the SEC to Reopen Comment Period on ESG and Climate Investing Rules
Several state attorneys general (AGs) petitioned the SEC to extend the reopened comment period for multiple rulemaking releases and requests for comment after the SEC reported it never received some public comments submitted through its internet comment form due to technological errors. In response to the lost comments, the SEC reopened the comment period on 11 rulemaking releases and one request for comment for 14 days. The state AGs contend that this shortened comment period does not adequately ensure interested parties can comment on the SEC’s rules.
Montana’s AG points out that this shortened comment period may be troubling since some of the rulemaking releases contain updates on ESG investment practices and a climate disclosure rule. The state AGs assert that these and similar proposed rules may reorder companies’ priorities from maximizing shareholder returns to improving climate reputation and may violate the First Amendment and exceed the SEC’s statutory authority.
Multistate Coalition of Attorneys General Investigates Major Banks for Their Involvement with Foreign Banking Alliance and ESG Investment Strategies
A multistate coalition of attorneys general (AGs) served civil investigative demands on several major banks to subpoena documents relating to the banks’ involvement with the United Nations’ Net-Zero Banking Alliance (NZBA). The NZBA requires its member banks to set emissions reduction targets in their investment and lending portfolios to achieve net-zero emissions by 2050. This investment strategy has been coined “ESG investing” for its potential focus on environmental, social, and governance factors rather than solely focusing on maximizing shareholder returns. Virginia’s AG joined the coalition to ensure Virginia farmers and companies that deal with fossil-fuel-related activities are not punished and to investigate whether these major American banks have ceded their authority to a foreign body.
October 19, 2022 | State of Virginia Office of Attorney General, Attorney General Miyares Joins 19 State Coalition in Launching Investigation into Six Major Banks over ESG Investing
Attorneys General Submit Formal Comments Against the Federal Highway Administration’s Proposed Rule Requiring Net-Zero Highway Emissions
Several state attorneys general (AGs) formally commented on the Federal Highway Administration’s (FHA) proposed rule that would require states to measure greenhouse gas (GHG) emissions and establish declining GHG emission targets for on-road emissions to achieve net-zero emissions by 2050. For example, Montana’s AG asserts that the proposed rule both exceeds the FHA’s authority to regulate GHG emissions and fails to adequately consider the major questions doctrine, which generally requires an agency to have clear congressional authorization to decide an issue of major national or political significance.
In addition to arguing that the proposed rule is an issue of major significance – and thus violates the major questions doctrine – the state AGs also contend that the proposed rule violates federalism principles and the Appropriation Clause and resembles rules previously repealed for being burdensome and duplicative.
October 13, 2022 | State of Montana Office of Attorney General, Attorney General Knudsen Fights Biden Administration Rule Requiring States to Reach Net-Zero Highway Emissions
California Attorney General Guides Local Jurisdictions on Mitigating Wildfire Risks in New Development Projects
California’s attorney general issued guidance to local jurisdictions on best practices to disclose, analyze, and mitigate wildfire risks in compliance with the California Environmental Quality Act (CEQA) and to encourage local jurisdictions to think proactively about reducing wildfire risks while accommodating future housing and development needs.
The wildfire-risk guidance discusses several variables, including (1) Project Density (how project density influences how likely a fire is to start or spread and how likely a development and its occupants are to be endangered by fire); (2) Project Location in the Landscape (how project placement interacts with topography, fuel, climatic conditions, and fire weather to influence fire risk); and (3) Water Supply and Infrastructure (whether there are adequate water supplies and infrastructure, including the potential loss of water pressure and power, to address firefighting needs within the project site). Those variables should be considered when analyzing a development project’s impact on wildfire risk.
The guidance also strongly encourages local jurisdictions to engage in evacuation modeling and planning when analyzing how new projects may impact the evacuation efforts of project occupants and their neighbors and whether emergency responders could simultaneously access the area to fight wildfire – especially for projects located in high-wildfire-risk areas with an increased risk of ignition and evacuation impacts. Further, the guidance offers several practical measures to help jurisdictions comply with CEQA’s requirement to adopt all feasible mitigation measures, including installing undergrounding power lines, placing projects close to emergency services, and enforcing parking limitations to ensure access roads are not clogged during an emergency.