Republican Attorneys General Probe ‘Big Four’ Accounting Firms’ Climate ‘Activism’

A coalition of 16 Republican attorneys general is investigating America’s four largest accounting firms over their “burdensome” push for climate-related financial disclosures, which they say drive up prices for consumers and may violate state law. On Monday, the Republican-led states sent a letter to Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers, known as the “Big Four,” warning that their push for climate-related disclosures violates “professional duties of integrity and objectivity.”The letter notes that the Securities and Exchange Commission commissioner, Hester Peirce, has warned that climate-related disclosures “saddle small businesses and farmers supplying those public companies with burdensome requirements,” and said that they encourage costly litigation while forcing companies to produce troves of documents assessing and disclosing climate risks that are not important to their business. The disclosures may also pressure businesses to change their business practices, and add to the cost of the audits conducted by the firms. Nebraska’s attorney general, Mike Hilgers, said in a statement, “The Big [Four’s] climate commitments force clients to make burdensome climate-related disclosures that drive up the costs of their services and place onerous requirements on farmers and small businesses.”“These costs will ultimately be passed onto consumers, who will be forced to bear the burden of increased prices for food, energy, and other everyday products,” Mr. Hilgers said. Iowa’s attorney general, Brenna Bird, said that companies turn to the “Big Four” for “accounting expertise, not undisclosed political activism that is going to drive up their costs.”“If the Big [Four] want to continue to do business with Iowans and Iowa’s companies, they either need to stick to just accounting or make good on their promise of transparency and fully disclose that they are demanding extra-ordinary compliance for their woke positions while raising rates on their customers,” Ms. Bird said. The letter to the “Big Four” notes that they were the “founding members” of the Net Zero Financial Service Providers Alliance, whose members aim to “align all relevant services and products to achieve net zero greenhouse emissions by 2050 or sooner.”The attorneys general say that by pushing climate-related disclosures, the firms may be violating federal laws requiring them to be “independent in fact and appearance” while conducting audits. “These commitments create an appearance that the Big Four have agreed to compromise their independence in favor of pursuing climate-related goals external to the audit,” the letter reads. “Furthermore, the Big Four’s advertising about their independence, integrity, and objectivity, without disclosure of their climate-activist commitments and actions to impose additional regulatory burdens on their customers, may constitute deceptive and unfair acts and practices under state law.”The letter asks the firms to respond to dozens of questions about their climate commitments, such as how pushing firms to produce climate-related disclosures aligns with their “professional duty of independence.” It also asks the firms to explain the impact of their climate initiatives on “small businesses or farmers that are part of the supply chain for public companies.”Additionally, the attorneys general ask the “Big Four” to explain how they did not deceive consumers of audit services by asserting their independence while not disclosing they made commitments to help align companies with their net zero goals.The head of consumer advocacy organization Consumers’ Research, Will Hild, said in a post on X, “These Big 4 accounting firms were caught prioritizing woke activism over serving their customers and financially benefitting from forcing costly requirements onto their customers — all while they claim to be independent/objective, which they *clearly* are not.”Mr. Hild said that free-market-focused Consumers’ Research “fully supports” the attorneys general in “stepping in to hold these firms accountable for putting activism ahead of consumers and the small businesses they are supposed to serve.”None of the four firms responded to The New York Sun’s request for comment by the time of publication.

Republican Attorneys General Probe ‘Big Four’ Accounting Firms’ Climate ‘Activism’

Republican Attorneys General Probe ‘Big Four’ Accounting Firms’ Climate ‘Activism’

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