Austin, Texas – Ahead of the Texas Senate Committee on State Affairs interim hearing, Unlocking America’s Future (UAF) is reminding policymakers and voters of the real costs of Texas’s anti-ESG law SB13, which blacklists financial institutions based on the preferences of far-right state lawmakers.
This law harms the financial security of public sector retirees by injecting politics in pension fund management, as well as local taxpayers who have paid hundreds of millions more for basic services.
“Far-right Texas lawmakers are forcing their constituents to pay a costly premium just to score political points with their Big Oil donors on an issue that even the most conservative voters don’t support,” said Kyle Herrig, spokesperson for Unlocking America’s Future. “Texas’s law blacklisting even high-performing, cost-effective firms from doing business with the state doesn’t just kill jobs and hurt the economy—it risks the retirement security of dedicated public servants. Texas lawmakers have an opportunity to address the real-world harms of their extreme agenda. At the hearing we’ll learn whether they’re willing to seize it.”
Key concerns about SB13 heading into the hearing include:
- Economic Consequences of Blacklisting Financial Institutions
- Enacted in 2021, SB13 bars certain firms from handling public funds based on their investment strategies, particularly those considering ESG factors.
- A study by the Texas Association of Business Chambers of Commerce Foundation found that such blacklisting resulted in $668.7 million in lost economic activity, over 3,000 lost jobs, and $37.1 million in reduced state and local tax revenue since the law’s implementation.
- A Poorly Written Law
- No state officials–from Comptroller Glenn Hegar who maintains the blacklist to Attorney General Ken Paxton–have clearly stated how blacklisted companies can remove themselves from the blacklist.
- The blacklist is failing by its own criteria—upwards of $5 billion in blacklisted funds invest in fossil fuels.
- Public Opposition to Politicized Investment Policies
- A majority of Texas voters (56%) oppose banning state retirement funds from working with firms based on political considerations.
- Texans recognize that imposing political agendas on pension funds can negatively impact the economy, energy and gas prices, and their retirement savings.
- Risk to Retirement Security
- Political interference detracts from fiduciary responsibilities, potentially introducing new risks into pension funds.
- Public employees depend on prudent investment strategies to ensure their financial stability in retirement.
UAF urges interested parties and members of the media to review our report on the real world impacts of extreme politics by visiting Textremism.com.
