SBTi Showdown: Republican States Set Out Antitrust Threat

August 15, 2025

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By Jack Grogan-Fenn

A letter from 23 US states has warned the Science Based Targets initiative (SBTi) that its Financial Institutions Net Zero Standard risks “violating federal and state antitrust laws as well as state consumer protection laws”.

Writing to David Kennedy, CEO of the initiative who joined from EY earlier this year, the letter led by Iowa and spearheaded by its Attorney General Brenna Bird stated that agreements made by companies as part of initiatives to reduce emissions “may violate Federal and State laws”.

The letter arrives as Republican-run states continue to ramp up their campaign against climate change and net zero-focused organisations and efforts. It branded net zero programmes as being “unrealistic and harm[ing] both American agriculture and industry”.

The letter particularly named the SBTi’s Financial Institutions Net Zero Standard, which launched last month. The standard requires companies to set a fossil fuel transition policy requirement which details “clear steps and timelines” for ceasing new financial activities and insurance services to the fossil fuel industry.

The states have also demanded documents and information from the SBTi. This includes communications between the initiative and its members on net zero commitments and the development of the SBTi Financial Institutions Net Zero Standard.

The states also called for a description of the relationship between SBTi, its member organisations, and any member organisation’s US-based affiliate, as well as a description of the SBTi’s “core funding sources”. The letter set a September 8 deadline for the SBTi to respond.

In a statement released alongside the letter, Iowa’s Bird accused the SBTi of “trying to redo President Biden’s radical green scheme”, adding that “if successful, they’ll hurt farmers, energy producers, and Iowans”.

“Its program limits output of goods or services, and these unrealistic net-zero programs harm both American agriculture and industry,” she alleged. “Making net-zero a goal actively harms Americans, creates risk for energy independence, and increases the cost of safe, healthy, nutritious food.” 

Nearly 135 financial institutions across six continents have so far committed to set net-zero targets against the standard. It was launched following two public consultations, pilot testing by more than 30 financial institutions, and extensive input from an expert group of independent specialists comprising NGOs, academia, and industry. 

The letter claims that it is “illegal for companies and organizations to enter into agreements to limit output of goods or services” with climate and net zero goals in mind. It added that engagement with Climate Action 100+ (CA100+) and other net zero alliances is the same as engaging with the SBTi.

SBTi was established in 2015, being developed by CDP, the UN Global Compact, the We Mean Business Coalition, the World Resources Institute, and the WWF. The UK-based initiative creates standards, tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets in line with what is needed to reach net-zero by 2050 at latest.

The initiative this week announced that there had been a 97% increase in companies setting near-term science-based targets, while those setting both near-term and net-zero targets increased by 227% between the end of 2023 and the end of Q2 2025.

Alongside Bird, the letter was co-signed by the attorneys general of Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, and Wyoming.

Last month, Florida’s Attorney General James Uthmeier issued subpoenas to investigate whether SBTi and CDP had violated state consumer protection or antitrust laws. A statement alleged that the organisations had “coerc[ed] companies into disclosing proprietary data and paying for access under the guise of environmental transparency”.

The investigation proports to “examine deceptive trade practices”, including “misrepresenting the objectivity of environmental data used by investors and consumers”. It will also look into potential antitrust violations, including whether CDP’s “efforts to pressure or punish companies that don’t participate result in anticompetitive effects”.

Republican-run US states have also targeted the ESG-related investment activities of several large asset managers. As reported by Minerva Analytics, a letter signed by 26 finance officials from 21 red states expressed “deep concern” over the “erosion of traditional fiduciary duty” in American capital markets. These 21 states are the same which signed the letter to the SBTi.

The letter detailed five steps for asset managers looking to do business with the 21 states, including abstain from net zero climate mandates and disclosing affiliations and collaborative initiatives that “could influence investment strategy or engagement priorities”, including CA100+.

Republican members of the House of Representatives previously wrote to the founders of CA100+ claiming that the organisation’s role in co-ordinating how some companies pursue ESG policies may violate antitrust laws.

Minerva Analytics also reported in February that Republican finance officials from 18 states had urged US Securities and Exchange Commission and Department of Labor leaders to prohibit asset and retirement plan managers from considering ESG or DEI factors in investment decisions.

Texas has spearheaded an anti-ESG campaign against both asset managers and proxy advisors. BlackRock, State Street and Vanguard are set to face a Texas-led antitrust lawsuit from 13 Republican states after a US judge declined to dismiss the vast majority of the counts in the case, as reported by Minerva Analytics.

Meanwhile, regulation requiring deeper disclosures on voting recommendations from proxy advisors operating in Texas is on track to come into effect on September 1, as reported by Minerva Analytics. 

Senate Bill (SB) 2337 would require proxy advisors that “deviate” from acting in the “financial interest” of shareholders to “clearly disclose that fact”. This includes advisors recommending votes based on ESG investing, DEI factors and social credit or sustainability scores.

However, Minerva Analytics reported that proxy advisors have pushed back and are suing Texas, with cases from two separate proxy advisors reportedly arguing that the law was unconstitutional and eroding their First Amendment right to advise clients. One of these cases against Texas is due to commence on August 28.

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Last Updated: 15 August 2025