Good.
A federal district judge on Wednesday declared a 2021 law restricting state investments in companies boycotting the fossil fuel industry unconstitutional, calling it “facially overbroad” and citing First and Fourteenth Amendment concerns.
Legislators passed Senate Bill 13 as a way of discouraging divestment from oil and gas companies, as financial figureheads at the time had signaled they intended to make climate change initiatives a larger factor in their investment considerations. The law requires the comptroller’s office to maintain a list of financial firms that refuse, terminate or penalize business with a fossil fuel company “without ordinary business purpose.” SB 13 is commonly referred to as an “anti-ESG” law, which stands for “environmental, social and governance.”
U.S. District Judge Alan Albright delivered the summary judgment, and affirmed in the 12-page order that the way SB 13 determined what constituted boycotting a company was too broad and undermined free speech protections of firms affected.
“SB 13’s ‘boycotting’ definition is comprised of three clauses, all of which are undefined and not susceptible to objective measurement or determination,” Albright wrote in the ruling.
Albright also wrote that the law had already led to “discriminatory enforcement” of its provisions. After SB 13 was passed, huge state investment funds, including the Teacher Retirement System of Texas and the Texas Permanent School Fund, divested billions from firms.
The Texas Comptroller’s office maintains a publicly available list of more than 300 companies they identified as boycotting energy companies, which was last updated in June. During that update, BlackRock, one of the largest international investment firms, was removed from the list after it excused itself from two major climate initiatives. Then-state Comptroller Glenn Hegar lauded the move as a “meaningful victory” for Texas’ economy.
The American Sustainable Business Coalition filed the suit in 2024 against Hegar and Attorney General Ken Paxton, alleging five different counts of free speech and due process violations. The ASBC subsequently moved for summary judgment on three of those claims in January 2025, and Albright ruled in their favor for all three Wednesday.
In a statement, David Levine, ASBC president and co-founder, said SB 13 had already cost the state hundreds of millions of dollars and called the ruling a “massive win” for sustainable businesses.
“The court has affirmed what we’ve always known: you cannot punish businesses for their investment decisions or silence those who speak about climate risk,” Levine said.
See here and here for some background. As noted before, and more recently with the lab-grown meat ban, it’s clear that Texas Republicans firmly believe that a whole lot of businesses they like need to have the full support of the Texas government in order to have a chance to succeed. I get that this is primarily about owning the libs, which is at this point the sole animating force of the Republican Party, and we can snark about it all we want, but it really does shock me how far these guys have moved away from their once-processed obsession with the “free market”. Certainly as recently as ten years ago I never would have seen that coming. Sure, they’ve always tilted things towards business, some businesses in particular, but that was almost always about removing controls, not adding them. Where’s Milton Friedman when you actually do need him? I remain boggled. The Current has more.