Austin, TX — Amid an unprecedented legislative attack on responsible investing in Texas, Unlocking America’s Future is tracking more than 20 anti-responsible investing bills currently moving through the state legislature. This week, two particularly concerning bills passed in the Senate—Senate Bill 1057 and Senate Bill 2337—marking a significant rollback in corporate accountability and threatening the retirement savings of hardworking Texans.
On May 7, Senate Bill 1057 (also known as HB 4115) was sent to the Governor to sign into law. This legislation represents one of several attempts in the Texas legislature to restrict shareholder rights to only the wealthiest investors by dramatically raising the barrier for shareholder proposals—requiring either $1 million in securities or a 3 percent ownership stake. In effect, this bill silences the very shareholders who have the most at stake when assessing business risks.
Yesterday, the Senate also passed Senate Bill 2337, which would force proxy advisors to ignore credible material risks in their assessments. This puts the retirement savings and investments of hardworking Texas families at risk by prioritizing an ideological agenda over sound economic policy.
WHAT’S ELSE IS MOVING IN TEXAS’ ATTACK ON RESPONSIBLE INVESTING THIS WEEK
- Senate Bill 495, which prevents the Texas Department of Insurance from adopting rules based on responsible investing models or standards, is headed to the floor for a vote. This bill undermines the insurance industry’s ability to assess climate and other responsible investing risks.
- Senate Bill 945, which just passed in the Senate would prohibit shareholder proposals that right-wing lawmakers deem “political”—in reality, that means any proposals that protect the investors, shareholders, and Texas families from risks by introducing shareholder proposals that limit insurance for fossil fuel companies, promote greenhouse gas emission disclosure/reduction, or advance responsible investing.
- Senate Bill 2138 extends anti-responsible investing restrictions to the University of Texas and Texas A&M University permanent university funds and other public higher education investments, stripping educational institutions of their autonomy to avoid riskier investments. This bill marks a political overreach into the universities and would force universities to maintain investments in potentially underperforming
- Senate Bill 946 forces financial institutions to ignore risks when making loans, potentially threatening financial stability, by banning lenders from denying loans based on responsible investing measures. This bill also passed in the Senate and will now go to the House.
UAF continues to urge lawmakers to stand against this harmful legislative package. If enacted, these and other anti-responsible investing bills under consideration would:
- Force investment managers to ignore material financial risks
- Potentially reduce returns on state pension funds
- Create regulatory confusion for Texas businesses
- Create a two-tiered system where only the ultra-wealthy have meaningful input on corporate behavior
- Disadvantage Texas in competing for future-focused industries and jobs
- Put Texas companies at increased legal risk for considering environmental, social, or anti-corruption factors when making investments.
UAF calls on all lawmakers who care about the financial well-being of everyday Texans to reject these harmful measures.
For a comprehensive analysis of this coordinated legislative assault on responsible investing and its potential impacts on Texas families, visit our fact sheet here.
