Texas AG Paxton joins probe into S&P Global’s use of ESG in credit ratings

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The ESG credit indicators, ESG scores, and ESG evaluations that S&P publishes “appear to politicize what should be a purely financial decision”, Paxton said in a statement on Wednesday.

The probe is being led by Missouri and underscores a push by Republican-led states against what they see as a “woke” bias at financial companies.

S&P Global did not immediately respond to a request for comment.

Interest in ESG investing has exploded in recent years, prompting ratings agencies to come up with new ways to assess how companies fare on ESG factors.

But politicians in conservative states have argued that companies are letting progressive values get in the way of financial decisions.

In August, Missouri and 18 other states launched an investigation into financial research provider Morningstar Inc to assess whether it violated consumer protection law with its evaluations of companies’ performance on ESG issues.

Last month, Texas also included asset management giant BlackRock Inc (NYSE:BLK) in a list of companies whose stance on boycotting oil and gas stocks could trigger divestment by public agencies. BlackRock remains a major investor in oil and gas companies.