Court Says Texas Cannot Punish Investors for Taking Climate Change into Consideration - CleanTechnica

A U.S. District Court has ruled that Texas cannot enforce its 2021 "anti-ESG" law (Senate Bill 13), which sought to prohibit pension funds and other public entities from considering environmental, social, and governance (ESG) factors—such as climate change—in their investment decisions. The court found the law unconstitutional, violating the First and Fourteenth Amendments by imposing vague and overly broad restrictions that penalized protected speech and association. The law also conditioned access to public investments and contracts on compliance with these restrictions, effectively blacklisting financial firms that avoided fossil fuel investments. This ruling challenges similar laws enacted or proposed in other states that aim to restrict how public funds address climate-related risks. Advocates, including Ben Cushing of the Sierra Club, emphasized that managing financial risks related to climate change is a crucial part of responsible investing and fiduciary duty. They argue that political interference should not distort financial markets or punish firms for their investment choices. The decision is seen as a