The Commonwealth of Virginia is joining 19 other Republican states in investigating Environmental, Social, and Governance (ESG) investment practices of six major banks participating in the U.N.’s Net-Zero Banking Alliance (NZBA).
“The U.N’s Net-Zero Banking Alliance, which includes American companies, punishes Virginia farmers and Virginia companies that deal with fossil fuel-related activities. Virginians are not subject to U.N. business standards. That’s why I’ve joined a coalition of attorney generals investigating six major American banks for ceding authority to a foreign body,” Attorney General Jason Miyares said in a press release.
NZBA members who are the subject of the investigation include Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo.
The Alliance, which is overseen by the UN Environment Programme Finance Initiative, boasts 120 members that represent nearly 40% of global banking assets. All NZBA participants have pledged to align their lending and investment portfolios with achieving net-zero emissions by 2050. It launched in April 2021 with 43 founding members.
Moreover, the group adheres to the Glasgow Financial Alliance for Net Zero and the Principles for Responsible Banking, an initiative requiring banks “take action to align their core strategy, decision-making, lending and investment” with the UN Sustainable Development Goals and Paris Climate Accords.
Their website reads, “The Alliance reinforces, accelerates and supports the implementation of decarbonisation strategies, providing an internationally coherent framework and guidelines in which to operate, supported by peer-learning from pioneering banks. It recognises the vital role of banks in supporting the global transition of the real economy to net-zero emissions.”
In August, Virginia Attorney General Miyares joined 18 attorneys general to investigate Morningstar Inc., a financial services firm that provides ESG ratings, and its subsidiary, Sustainalytics, for allegedly violating Virginia’s consumer protection laws. Missouri Attorney General Eric Schmitt, who spearheaded the investigation, requested civil investigative demands to Morningstar and Sustainalytics in July given the latter’s “Human Rights Radar” leaning on anti-Israel bias in ESG metrics.
Earlier in June, Morningstar cut ties to its subsidiary for promoting Boycott, Divestment, and Sanctions (BDS) campaigns following an independent investigation that found it focused “disproportionately on the Israeli/Palestinian conflict.”
Virginia joining the fight against ESG is important for upholding the rule of law and holding ESG proponents to account. Further, if Virginia decides to follow neighbor West Virginia’s footsteps in divesting from BlackRock, it’ll recoup $29.6 million in assets.
To learn how to fight against ESG, check out our guide HERE.