State Treasurers Caught Wall Street Giving Chinese Oil Giants a Better Grade Than Texas

Wall Street's biggest credit agencies keep downgrading American oil and gas companies over an issue MAGA thought was long behind us.

Now, twenty two state financial officers just found out how those same agencies grade Beijing.

What those agencies say about Chinese state companies is the kind of detail that could get them hauled in front of Congress.

The Letter That Accuses Moody's, Fitch, and S&P of Grading China on a Curve

Financial officers from twenty two states sent a joint letter to the three biggest credit rating agencies in America.

Their message was simple, the agencies are still running outdated climate and ESG models, and those models are not built on anything close to consistent math.

Billions of taxpayer dollars sit in these rated companies through state pension funds, and every downgrade chips away at the money that eventually funds a classroom, a squad car, or a fire truck.

The officers say Moody's, Fitch, and S&P never fully explain how a company's ESG grade actually gets calculated, which makes the whole system impossible to challenge or verify.

Arizona Treasurer Kimberly Yee already put it bluntly in a Bloomberg interview, "It's a political scorecard, and not a financial scorecard."

That is not a new complaint.

Texas forced S&P into a retreat back in 2022, after the state and a coalition of others sent the firm a formal demand asking how it was folding ESG factors into its credit ratings.

S&P backed off entirely, freezing every ESG score it had already published and refusing to issue any new ones.

First Assistant Attorney General Brent Webster said Texas was "proud of our litigation and investigations," and the office has kept monitoring rating practices ever since.

Four years later, the financial officers say the same scoring bias never actually left the building, it just stopped wearing an ESG label.

S&P Handed Two Chinese State Oil Giants an A Plus Grade No US Driller Can Match

Here is the detail that should embarrass every rating agency in New York.

The letter, as reported by Just the News, lays out the contradiction plainly, American oil and gas companies took the downgrade hit for ESG risk, while two state owned oil companies in China walked away with an A plus.

S&P's justification, according to the letter, was that those firms score better on ESG metrics than their global competitors.

No country on the planet burns more carbon than China does, full stop, no asterisk.

The state financial officers called the ratings "nonsensical by any objective standard," and it is hard to argue with them.

An American driller in Midland or Oklahoma City gets penalized for the same fuel source that a state owned company in Beijing gets praised for producing.

Every executive running these three rating agencies knows exactly what a credit score is supposed to measure, whether a company can pay its debts.

Somewhere along the way, Moody's, Fitch, and S&P decided that measuring carbon virtue mattered more than measuring actual financial risk, and they built an entire scoring system around it without ever opening the math up to public review.

Chinese state oil companies do not answer to shareholders and operate inside a government that has never met a coal plant it did not love, yet they still walked away with better marks than drillers in Texas.

Every state pension fund, every teacher's retirement account, every firefighter's pension tied to an American energy stock just took a hit so a handful of analysts in New York could feel good about their spreadsheets.

Twenty two state financial officers just put these agencies on notice that the spreadsheet games are over, and Wall Street should expect a lot harder questions before the next downgrade sticks.

Sources:

• Just the News, "State Treasurers Allege Top Credit Rating Agencies Give Higher Rankings to Chinese Companies," Just the News, October 14, 2026.
• Texas Attorney General, "Major Company Reverses ESG Credit Rating Practice in Victory for Texas's Efforts Against Improper Political and Social Metrics," Texas Attorney General, 2026.
• The Heritage Foundation, "What Is ESG?," The Heritage Foundation, 2026.
• Idaho State Treasurer's Office, "Idaho Officials Object to S&P's Use of ESG Criteria in State Credit Ratings," Idaho State Treasurer's Office, 2026.
• Arizona State Treasurer's Office, "Arizona Treasurer Kimberly Yee Criticizes ESG Ratings and Policies in Bloomberg Article," Arizona State Treasurer's Office, 2026.