The Hierarchy of Evaluative Authority: Credit Rating Agencies and the Limits of Evaluative Autonomy
Executive Summary
In the spring and summer of 2026, three of the world’s most consequential financial institutions found themselves on the receiving end of a contest usually reserved for the governments and companies they evaluate. On 22 April, twenty-three Republican state attorneys general wrote to Fitch, Moody’s and S&P Global Ratings, copying the Securities and Exchange Commission, alleging that the agencies had allowed environmental, social, and governance (ESG) considerations to distort their fossil fuel ratings and demanding that the downgrades be reversed or justified on narrower, non-ESG grounds. On 27 August, a coalition of twenty attorneys general led by Letitia James of New York and Rob Bonta of California wrote to the same Commission disputing the factual basis for that letter and arguing that its underlying demand risked pressuring the agencies to abandon independent, fact-based methodology. Read together, the two letters look like another instalment in the American argument over ESG. This essay argues that they are something more analytically interesting than that.
Credit rating agencies are conventionally studied as evaluators: institutions whose opinions shape the cost of capital for governments, corporations and municipalities, and whose judgements those actors cannot simply decline to anticipate. This essay inverts the angle of enquiry. It asks what happens when the evaluator itself becomes the object of scrutiny by actors who command genuine legal and political leverage. The answer rests on a distinction between evaluative authority - the capacity to render consequential judgements about others - and evaluative autonomy - the capacity to determine the terms on which those judgements are reached without an external party substituting its own preferred conclusion. Credit rating agencies possess the former in abundance. The two 2026 letters expose how conditional the latter actually is.
The essay does not adjudicate the underlying climate dispute, nor does it treat the two interventions as mirror images pursuing opposite substantive outcomes through identical means. The April letter makes explicit demands for changed behaviour. The August letter argues chiefly against the legitimacy of enforcement pressure and states plainly that its signatories take no position on the agencies’ actual conduct. What both letters share is a structural feature rather than a shared aim: each is compelled to argue, from opposite positions, about which evidentiary register should govern legitimate forward-looking credit judgement, exploiting the fact that an agency’s own procedural language, such as sufficient visibility or reasonable certainty, cannot fully determine that question on its own. The essay traces how American and European law each try to hold open a narrow space in which agencies can be governed without being told what to conclude, and asks how stable that space actually is. It closes with a more precise account of hierarchy: not a single vertical order with credit rating agencies fixed permanently at the top, but a relational structure in which the same institution can hold authority over one set of actors while remaining subject to another’s capacity to govern the terms of its own judgement.
