State Attorneys General Challenge Big Four Accounting Firms Over Climate Disclosure Policies
A coalition of state attorneys general from Nebraska, Florida and Alaska sent a 38-page letter to Deloitte, EY, KPMG and PwC demanding justification for their climate-related commitments, claiming the firms jeopardize audit independence and impose costly reporting on businesses.
A group of state attorneys general led by Nebraska, Florida and Alaska has issued a 38-page demand letter to the four largest accounting firms—Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers—questioning their participation in international climate initiatives. The officials allege that the firms’ commitments to frameworks like the Task Force on Climate-related Financial Disclosures and the Net Zero Financial Service Providers Alliance compel clients to report Scope 1, 2 and even Scope 3 emissions regardless of materiality, thereby increasing costs for small businesses and farmers.
They further warn that such activities could compromise auditor independence by exposing firms to pressure from influential climate groups such as GFANZ. The letter seeks explanations of how the firms reconcile these commitments with professional standards, asks for revenue figures from climate-related assurance and ESG consulting for the last five fiscal years, and requests any documentation of conflicts disclosed to audit clients.
None of the firms have replied to the inquiries. Critics, including consumer-advocacy groups, say the firms are prioritizing climate activism over shareholder interests while profiting from the expanded reporting requirements.
Why it matters
The challenge could reshape how major accounting firms handle climate reporting, affecting audit standards and costs for U.S. businesses.
In this story
