16 States warn Big 4 accounting firms over “pushing climate-related disclosures”

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🗞️ Driving the news: A coalition of 16 state Attorneys General, led by Florida, Texas, Nebraska and Alaska, has written to Deloitte, EY, PwC and KPMG warning of potential violations of state law and duties of independence through their commitment to pushing climate-related disclosures in financial reporting
• The letter cites participation in the TCFD and the now-disbanded Net Zero Financial Service Providers Alliance, alongside support for the ISSB climate standard

🔭 The context: The AGs argue the firms' climate commitments may breach duties of independence, integrity and objectivity, creating conflicts of interest by supporting disclosures that raise client costs while benefiting audit providers
• They also claim the firms' advertising may violate state unfair and deceptive practices laws, and that state and federal contracts may be breached, raising the prospect of penalties or termination
• The letter includes extensive documentation requests
• It follows SEC Chair Paul Atkins warning the agency may reconsider rules permitting foreign companies to file under IFRS, and earlier state warnings to US companies against complying with the EU's CSRD and CSDDD.

🌍 Why it matters for the planet: Assurance is what separates an emissions figure from a marketing claim, as auditors verify layer beneath corporate climate reporting
• Deterring the Big 4 from supporting disclosure frameworks weakens that layer at the point where it is being built out, in the same year California is accepting unassured submissions in its first reporting cycle
• Without independently checked emissions data, neither investors nor regulators can distinguish real reductions from accounting choices, and abatement cannot be tracked against targets

⏭️ What's next: The firms face documentation requests, including on the impact of their commitments on small businesses and farmers in public company supply chains
• Contract review and UDAP enforcement remain the stated levers if responses do not satisfy the coalition

💬 One quote: "The Big 4'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" — Mike Hilgers, Nebraska Attorney General

📈 One stat: 16 state Attorneys General signed the letter, targeting all four major audit firms

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