Texas sued for anti-ESG laws
Texas was sued on Thursday by a nonprofit whose members support environmentally-friendly policies, and which seeks to block a state law targeting businesses that support reduced reliance on fossil fuels.
The American Sustainable Business Council claimed that the 2021 law, known as Senate Bill 13, violates the free speech rights of its members by prohibiting Texas from investing or contracting in businesses which, according to the state, "boycott" oil and gas.
Texas is one of the most important Republican-led states that cracks down on companies whose policies are anti-environmental, social and government (ESG). It's also very easy to get.
The largest oil producing state in the United States
In the lawsuit filed at the federal court in Austin, Texas, the State Attorney General Ken Paxton, and Comptroller Glenn Hegar - both Republicans who supported the 2021 law - were named as defendants.
Requests for comments were not immediately responded to by representatives of their offices.
Hegar, in connection with the law of 2021, maintains a listing of 16 financial firms and more than 35 investment funds whose ESG policy he believes unacceptably targets fossil fuel-based energies.
Hegar has added the British bank NatWest two weeks ago. Hegar added British bank NatWest to the list two weeks ago.
The American Sustainable Business Council has said that Senate Bill 13 is harmful to its corporate and individual member businesses. These members represent over 200,000 companies, even though Texas claims to be a business friendly state.
Hegar's fund list includes Etho Capital, Our Sphere and two other members.
The complaint stated that the law violates First Amendment rights by prohibiting companies from competing to receive state investment or contracts with the state if Texas believes the companies have a disfavored view about fossil fuels. Because SB 13 codifies discrimination based on viewpoint, it's presumptively inconstitutional.
American Sustainable Business Council v. Hegar et al., U.S. District Court for the Western District of Texas No. 24-01010. 24-01010.
(source: Reuters)
