AG Labrador Demands Answers from Big Four Accounting Firms Over Climate Change Conflicts of Interest

BOISE, ID - Idaho Attorney General Raúl Labrador joined a coalition of 15 state attorneys general in raising concerns over climate-related activism in a letter sent to the "Big 4" accounting firms: Deloitte; Ernst & Young; KPMG; and PricewaterhouseCoopers. The letter addresses the Big 4's stated commitments to push for climate-related disclosures in financial reporting, contrary to their professional duties of integrity and objectivity. The firms stand to financially benefit from the additional reporting, while the increased costs of compliance are passed onto small businesses and consumers.

"Idaho small businesses depend on their accountants to fight for their best interests," said Attorney General Labrador. "When the Big Four force their clients to pay higher fees for burdensome climate change reporting, it's a shakedown. Idaho businesses and consumers deserve better."

The Big 4 have committed to support a framework of climate-based disclosures as part of the Task Force on Climate-related Financial Disclosures. They were also founding members of the Net Zero Financial Service Providers Alliance, whose members committed to align their products and services with the Paris climate agreement's goal of achieving net zero greenhouse gas emissions by 2050 or sooner. The Big 4's climate activist commitments may violate professional duties of integrity and objectivity by creating conflicts of interest.

The letter addresses concerns that the Big 4's climate activism may violate state consumer protection laws by making deceptive representations and omissions to customers about the firms' independence when conducting audits. The Big 4 do not disclose their climate commitments, which is inconsistent with their stated commitments to independence, objectivity, transparency, ethics, and integrity. The Big 4 may have also violated state contractual provisions requiring compliance with state law, which could result in penalties and termination of the Big 4's contracts.

Joining Attorney General Labrador in today's letter are the attorneys general of Alabama, Alaska, Arkansas, Florida, Iowa, Mississippi, Montana, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, and West Virginia.