The Climate Trap for CEOs

Ms. James says the claims are fraudulent and “constitute deceptive business practices and false advertising.” No progressive promise by business goes unpunished, and other companies may be targeted in the same way. Progressive groups have followed Ms. James, filing a lawsuit against Tyson on Sept. 18 for the net-zero claims and for boasting about its “climate smart beef.”

Now state Attorneys General on the other side of the political spectrum are echoing her concerns. On Thursday AGs Brenna Bird of Iowa, Kris Kobach of Kansas, Mike Hilgers of Nebraska and Tennessee’s Jonathan Skrmetti sent letters to three prominent food companies that sell beef warning that their climate commitments may put them at risk for litigation.

“Those policies embrace impossible-to-achieve goals that create potential for consumer fraud violations,” the AGs wrote to Target Corp., Tyson Foods and Ahold Delhaize USA. The letter asks the three companies to confirm whether the climate statements cited by an outfit called Consumers’ Research remain the companies’ “current commitments and positions.”

Consumers’ Research is a consumer advocacy group that examines corporate environmental, social and governance (ESG) policies. Executive director Will Hild sent letters to the three companies this week noting that New York AG James’s lawsuit “highlighted a major risk to national grocers, food producers and food retailers” that have made similar climate commitments.

Mr. Hild’s letter to Target, the giant retailer, says the company has made claims and commitments nearly identical to those made by JBS. These include that the company “commit[s] to net zero GHG [greenhouse gas] emissions across our enterprise” by 2040. Tyson Foods has targeted 2050 for its net-zero greenhouse-gas emissions and says its efforts will continue “in adherence to Science Based Targets initiative (SBTi) criteria.”

All of this shows that companies that follow faddish political trends can get caught in a legal whipsaw. Many CEOs signed up for DEI and ESG commitments in recent years, often at the advice of well-paid consultants. They now find themselves at legal risk for not adequately delivering on the commitments.

CEOs understandably want to avoid political risk, and many think they can do that by signing up to progressive campaigns. This is naive. Politicians like Ms. James won’t be happy until they loot companies in businesses they don’t like through lawsuits and fines. The best business path is to focus on maximizing shareholder value, which is what CEOs are paid to do and happens to do the most good for society.

WSJ Opinion: Business Backs Away From DEI

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