Attorney General in Florida probes climate organizations for possible legal breaches

Florida Attorney General James Uthmeier is conducting an investigation into two prominent climate disclosure organizations, looking into potential violations of state consumer protection and antitrust laws. The two organizations under scrutiny are the CDP, formerly known as the Climate Disclosure Project, and the Science Based Targets Initiative (SBTi). The probe is centered around allegations of coercive practices involving the disclosure of environmental data.

Uthmeier’s office has issued subpoenas as part of the investigation, aiming to determine if these organizations have pressured companies into revealing confidential information and purchasing services in the name of environmental transparency. There are concerns about the objectivity of environmental ratings provided by these entities, with suspicions that companies might receive better scores or favorable treatment in exchange for payment.

The CDP boasts of operating the largest environmental disclosure system globally, where it gathers and assesses corporate environmental data. It is alleged that the organization charges fees to companies for reporting and updating their data and may offer positive feedback or improved scores in return for payment. Some major financial institutions such as Bloomberg, ISS, S&P Global, and Santander reportedly rely on CDP data for making investment decisions.

Additionally, the SBTi, a collaboration between CDP and the United Nations Global Compact, validates corporate climate objectives and directs companies to submit their progress using CDP’s platform. Uthmeier’s office is concerned that this relationship could create a cycle of profitability. The investigation will delve into potential deceptive trade practices, including the provision of services to enhance environmental scores, offering incentives for endorsements in exchange for payment, and misrepresenting the neutrality of environmental data used by investors and consumers.

There are also ongoing concerns about potential market manipulation or anticompetitive outcomes arising from the coordination between CDP and financial institutions. If companies face consequences for non-participation, it could raise questions about fair competition in the market. This investigation is part of a broader initiative by the Florida Attorney General’s office to examine the impact of environmental, social, and governance (ESG) initiatives on corporate behavior and market dynamics.