Hello and welcome back to Drill, I'm Amy Westervelt.

We've talked before on this show about the growing backlash against taking environmental, social, and governance, or ESG, factors into consideration when it comes to investing.

The Watchdog Group documented first revealed last year that state treasurers were getting in on the action, kicking woke investment firms like BlackRock out of their states.

Back then I wondered when the attorneys general would show up to join the fray and now sure enough they are here.

The Republican Attorneys General Association, Raga, our old favorite, has come to play in the anti-ESG space.

But first, a quick reminder, why all this upset about ESG all of a sudden in the first place?

Good question.

For a really long time, oil companies actually kind of loved ESG. It was all very loose and self-reported and it gave them a way to unlock so-called green capital.

But in 2021, the Securities and Exchange Commission, the SEC, looked around and went, huh, there are all these different ESG ratings and some of them seem a little scammy and no one knows what these disclosures even really mean.

These are the kinds of things that are our job to clean up, so we are going to provide formal guidance on climate risk disclosure.

And that is when you start to see corporate interests, fossil field companies and right-wing politicians lose their minds over ESG.

Because all of a sudden, they couldn't just write whatever they wanted to in a report.

They might have to actually disclose what their real climate risks are.

Here is Jesse Coleman with Documented.

I think that a lot of this, both the legislative side, this legal strategy, the strategy of using state treasures to pressure asset managers into attack climate disclosure, all of this is really mostly aimed at SEC scope three emissions disclosure requirements coming, you know, supposedly coming soon in the next couple of months.

I'm going to pause to define scope three.

That means how your product is actually being used, not how you're making it, which is a big deal for especially heavy polluting industries like oil and gas companies, for example.

Yeah, yeah, it's a really big deal.

You know, whereas ESG having a non-standardized ESG disclosure is no big deal to a major company, the SEC coming and saying, how much carbon emissions are you really responsible for?

Not just, you know, what you're claiming you're responsible for, but if you're an oil company, for example, how much carbon are you actually putting in the atmosphere from everything that you've gotten from underground?

What is your real impact?

And that is a really big deal.

...