23 States Warn SBTi Over Net Zero Antitrust Risks

A coalition of 23 U.S. state attorneys general, led by Iowa Attorney General Brenna Bird, has sent a letter to the Science Based Targets initiative (SBTi). They express concerns about possible violations of antitrust, consumer protection, and other laws linked to its net-zero commitments. The letter, signed by attorneys general from states like Florida, Texas, and West Virginia, requests information from SBTi and its members, especially regarding the newly introduced Financial Institutions Net-Zero (FINZ) Standard.

SBTi, founded in 2015, aims to set science-based environmental targets as a standard practice for corporations. Its role involves defining best practices for reducing emissions and achieving net-zero targets while helping companies set their goals and independently assessing and validating them. In July, SBTi finalized its FINZ Standard. This standard guides banks, investors, insurers, and other financial institutions in aligning their activities with net-zero goals. A key requirement is the publication of a “fossil fuel transparency policy.” This policy calls for an immediate end to financing projects connected to fossil fuel expansion. It calls for stopping general-purpose financing for companies expanding coal, ending financing for oil and gas companies involved in expansion by 2030, and transitioning energy activities to net-zero by 2050.

The attorneys general expressed serious concerns about these commitments. They suggest that they might lead to coordinated efforts to cut off funding and insurance for the oil and gas industry. The letter warns that financial institutions participating may risk violating federal and state antitrust laws by collectively refusing services to specific industries. This could be considered collusion, whether occurring in private discussions or through a formal program.

The letter also raises issues regarding consumer protection. The attorneys general warned that companies might engage in greenwashing if they fail to meet their climate goals or set unrealistic targets, misleading consumers about their environmental actions. They pointed out that even firms committed to the SBTi framework should recognize the unlikely chance of achieving global net-zero emissions by 2050 without widespread government mandates or unprecedented global cooperation.

The coalition mentioned other legal concerns, such as state laws that prohibit boycotting the fossil fuel industry and rules against making insurance coverage decisions based on unrelated factors. The letter questions whether insurers involved with SBTi are refusing to cover certain individuals or businesses due to emissions targets instead of risk assessments.

The attorneys general want detailed information from SBTi, including all communications between the organization and its members about commitments and the development of the FINZ Standard. They also ask for disclosures on SBTi’s funding sources, the insurance companies within the SBTi framework actively working to reduce emissions, and whether participation in SBTi influenced their underwriting or coverage decisions.

This action follows a similar move in August when Florida Attorney General James Uthmeier—also a signatory of the latest letter—announced an investigation into SBTi and the environmental disclosure platform CDP. This investigation looks into possible antitrust violations and deceptive trade practices, examining whether climate-related commitments result in actions that may unlawfully limit access to essential financial and insurance services for certain industries.

In announcing the letter, Attorney General Bird criticized SBTi’s objectives. She accused the group of promoting what she labelled a rebranded version of “President Biden’s radical green scheme.” Bird argued that such programs would hurt farmers, energy producers, and residents in states like Iowa by restricting the production of goods and services. She claimed that net-zero policies harm U.S. energy independence, raise production costs, and increase the price of safe and nutritious food.

The letter represents a new front in a broader political and legal battle over corporate climate commitments, especially those viewed as disadvantaging the fossil fuel sector. It highlights the growing scrutiny from Republican-led states over the role of voluntary, private-sector environmental standards in shaping investment and lending practices.

The signatories to the letter include attorneys general from Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, and Wyoming. Their collective push indicates a strong stance against what they perceive as coordinated restrictions on fossil fuel financing and insurance. This could lead to legal challenges that may influence how net-zero commitments are structured and enforced in the U.S.