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AG Mayes Stops Investigating Social Credit Scores by Financial Institutions

February 14, 2023

By Corinne Murdock |

On Monday, Attorney General Kris Mayes announced that her office would no longer investigate social credit scores imposed by banks and other financial institutions.

Mayes said in a press release that social credit scores — or, Environmental, Social, Governance (ESG) rating — were “politicized” issues that don’t merit investigation.

“While my predecessor’s administration spent time and resources launching politicized investigations into the environmental sustainability efforts of major financial institutions, my administration is committed to using the tools and resources at our disposal to protect and secure the rights of Arizonans on matters that affect their daily lives,” said Mayes. “Arizonans can expect my office to be laser-focused on issues like protecting Arizona’s natural resources – including water, combating fraud and scams, and safeguarding vulnerable groups like seniors and children.”

An ESG rating reflects the long-term environmental, social, and governance impacts an individual or company may pose, which in turn informs a banking or financial institutions’ decisions regarding investments, loans, membership, and so on. Examples of what could impact ESG scoring could include a company’s reliance on fossil fuels or an individual’s gun ownership. Last September, Treasurer Kimberly Yee prohibited the use of ESG scoring when determining state investments. 

Mayes also asserted in Monday’s press release that governments couldn’t dictate corporations or their investors concerning how to invest.

“Corporations should be permitted to access capital markets in ways that they feel are necessary for the advancement of their investor objectives and for society, as long as they are doing so in a lawful manner,” stated Mayes.  “Corporations increasingly realize that investing in sustainability is both good for our country, our environment, and public health and good for their bottom lines. The state of Arizona is not going to stand in the way of corporations’ efforts to move in the right direction.”

Mayes had already pulled Arizona out of an investigation involving 18 other attorneys general looking into six major American banks launched last October: Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo. The attorney general told KTAR News last month that this move was part of her effort to clean house of “political lawsuits,” which she said also included challenges to President Joe Biden’s student debt forgiveness.

Mayes gave notice at the time that her office would be pulling out of a number of lawsuits, though she didn’t clarify which ones. 

“You can anticipate that there will be a number of announcements in the coming weeks of us withdrawing from these lawsuits,” said Mayes.

Mayes’ predecessor, Mark Brnovich, launched multiple investigations over the last few years into banks and other financial institutions due to their ESG practices. 

Early on in her candidacy, Mayes pledged to make fighting climate change her top priority. Mayes promised to appoint a climate director on her first day in the office; if that appointment was made, it hasn’t been made public. 

Mayes, who also served as an Arizona State University (ASU) energy law professor, pledged to impose stricter enforcement of water quality and pollution laws.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

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