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ICYMI

ICYMI: American Sustainable Business Council Files Lawsuit Against Texas Law Costing State’s Economy Nearly $700 Million

August 30, 2024

Yesterday, the American Sustainable Business Council filed a lawsuit challenging the constitutionality of Texas anti-ESG law SB13. Since the law went into effect in 2021, Texas public entities have been forced to divest from financial institutions that practice responsible investing, costing the state nearly $700 million in lost economic activity and 3,000 lost full-time jobs, according to research from the Texas Association of Business. 

The lawsuit comes after Oklahoma district court Judge Sheila Stinson permanently banned a similar anti-ESG law in the state in July. 

  • Oklahoma’s Energy Discrimination Elimination Act (EDEA), passed in 2022, placed some of the world’s largest financial institutions on a blacklist for contracts with state agencies and political subdivisions, including BlackRock, Wells Fargo, JPMorgan Chase, and Bank of America. 
  • A study commissioned by the Oklahoma Rural Association in April found that municipalities incurred an estimated $184.7 million in additional expenses in the first 17 months of the EDEA’s implementation. 
  • The law was banned after significant criticism from local organizations and even teachers. 

This Texas law now faces a similar fate. The research is clear: anti-ESG bills are efforts to line the pockets of oil and gas CEOs at the expense of taxpayers. 

  • Governor Greg Abbott and Attorney General Ken Paxton, who have championed and fought to uphold these laws, have taken at least $57 million in combined lifetime campaign contributions from the oil and gas industry.
  • A study from the Waco-based Perryman Group shows the state’s recent divestment in companies over their stance on fossil fuels could cost Texas as much as $821 million and nearly 8,800 jobs by the end of the year. 
  • Over the next 30 years, anti-responsible investing laws in Texas have the potential to cost taxpayers $22 billion in higher interest rates and fees.
  • Recent polling reveals 83% of Texans say it’s not the government’s role to tell private financial institutions how to invest their customers’ money. In addition, 72% of Texas voters believe leaders in Texas have become less focused on fixing real problems and more focused on pushing an extreme agenda.
  • Earlier this year, Bloomberg reported numerous banned funds have oil and gas investments, showcasing the deep flaws in Texas’ law. 

Read more about the lawsuit: