Ill-advised and unconstitutional ideological crusades by conservative state legislators are infringing on the rights of American businesses and endangering America's future.
The Climate Crisis is Here…
It's no secret that the accelerating impacts of climate change are being felt worldwide. 2024 is likely to be the warmest year in recorded history, and nine of the hottest years on record have all been in the last decade. To take just one example, residents of Phoenix, Arizona experienced 113 days in a row this summer with over 100-degree temperatures.
With hotter days come more extreme weather events. In what was billed as a once-in-a-1000-year event, Sarasota, Florida and its environs experienced as much as ten inches of rain in just 24 hours this past June. (This followed once-in-a-millennium rainstorms in St. Louis, Kentucky, Death Valley in 2022, and Fort Lauderdale in 2023.) July saw Hurricane Beryl become the earliest-ever Category 5 hurricane to develop in the Atlantic. Last week, after another once–in–a–thousand–year rainstorm in Western NC, Hurricane Helene devastated the Southeast, bringing catastrophic flooding to Appalachian cities.
As climate impacts become increasingly extreme, we are collectively racing against time to reduce our greenhouse gas emissions before we reach 1.5 degrees of warming. The good news is the global renewable energy boom is here. With costs coming down and technology improving, the world will install an estimated 593 gigawatts of solar capacity this year, nearly 30% more than in 2023 and six times more than in 2019. Here in the U.S., led by California and Texas, we now have eight times more solar power and twice as much wind power as a decade ago. Battery storage capacity is also expected to nearly double this year, meaning more renewable energy can be saved and used whenever needed.
…But Texas Legislators Would Halt Our Progress
Since its oil boom days, Texas has always been an energy leader, and these days are no exception – Texas now leads the country in wind power and is second only to California in solar. The clean energy transition is crucial for the Lone Star state since Texas is especially threatened by warming temperatures and hurricanes. Its statewide energy grid is also increasingly overwhelmed: Texas suffered 210 power outages between 2020 and 2023, more than any other state.
So, given the urgent necessity of decarbonizing our energy grid and Texas's role as a renewable energy leader, why have its lawmakers been trying to sabotage progress against climate change?
In 2021, Texas conservatives passed S.B. 13, a misguided and arguably unconstitutional law requiring all state entities, like pension funds and the K-12 education endowment, to divest any business that has moved away from supporting fossil fuels. Meant as an ideological attack against the growing move towards Environmental, Social, and Governance (ESG) investing, S.B. 13, according to a study by the Texas Association of Business, cost Texas nearly $700 million in lost economic activity, $181 million in annual earnings, more than 3000 full-time jobs, and more than $37 million in tax revenues in F.Y. 2022-2023.
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S.B. 13's ideological crusade also prompted five of the largest underwriters for municipal bonds in Texas – JP Morgan Chase, Goldman Sachs, Citigroup, Bank of America, and Fidelity – to exit the Texas market, meaning much higher borrowing costs for Texas cities. These five banks "used to underwrite about 35% of the debt in the market," notes Wharton Business professor Daniel Garrett, "so they've left a really big gap." The Texas public school fund also pulled $8.5 billion from Blackrock to comply with the law.
Last month, supported by Democracy Forward, the American Sustainable Business Council (ASBC) filed a lawsuit against S.B. 13 and a similar law, S.B. 19, which forces state funds to divest from companies that restrict business with gunmakers. "SB-13 is not just a misguided policy," says David Levine, president and co-founder of ASBC. "It is an unconstitutional attack that stifles free speech and punishes businesses for prioritizing responsible investments." In fact, an Oklahoma District Court Judge has already struck down Oklahoma's anti-ESG law for similar reasons.
As Chris Tomlinson wrote in the Houston Chronicle of this "unconstitutional, authoritarian power grab that hurts all Texans," "whether you worry about climate change or not, the real issue is whether the government should dictate any company's investment strategy. True conservatives believe elected officials should stay out of private sector decisions."
It's Not Just Texas.
Unfortunately, Texas lawmakers are not alone in these attempts to hamstring American businesses. Per Reuters, 2022 saw at least 44 new bills or laws in 17 red states that attempted to penalize companies for investment strategies or behaviors they deemed too progressive, up from a dozen in 2021.
Among these was Florida Governor Ron DeSantis's infamous "Stop WOKE Act," which attempted to ban workplace trainings on improving race relations and which a federal judge permanently blocked in July. Similarly, the Republican-controlled House in Georgia passed a bill cutting tax breaks for Delta Airlines, the state's largest private employer, after its CEO lambasted new voting restrictions there. (The bill failed to pass the Senate.)
Even more frightening, the anti-ESG push has now been taken up by the authors of Project 2025, the Heritage Foundation blueprint to supercharge a second Trump presidency. In their report, they call for Trump's Department of Labor to "remove ESG considerations from ERISA," the law setting minimum standards for pension and health plans. After deriding ESG for taking into account woke causes like "reducing greenhouse gas emissions," the Project 2025 report decrees that "DOL should prohibit investing in ERISA plans on the basis of any factors that are unrelated to investor risks and returns." However, considering the impacts of climate change is precisely the type of long-term risk that businesses and investors should be evaluating to protect their returns and financial health.
Of course, the government plays an indispensable role in regulating companies, so they follow the law, do right by their workers and communities, and don't conduct business with America's enemies. But trying to force U.S. companies, by law, to uphold far-right conservative ideology is simply a bridge too far. It is, in a word, unconstitutional. And amidst a global climate crisis that threatens all Americans, especially those most vulnerable in our society, these misguided ideological crusades don't just jeopardize our future prosperity and global competitiveness—they endanger our communities, economy, and planet.