A U.S. district judge on Wednesday threw out a 2021 Texas law barring state investments in companies that “boycott” the fossil fuel industry, ruling that the measure violates constitutional protections of free speech and equal treatment under the law.
Republicans in the Texas Legislature championed Senate Bill 13 as a way to bolster the state’s oil-and-gas industry as some financial firms began giving concerns about climate change a bigger role in their investment decisions.
Under the legislation, the Texas comptroller was charged with maintaining a public list of investments off limits to state investment because of their perceived fossil fuels “boycotts.” As of press time, the list exceeds 300 businesses and includes funds from major financial firms such as Fidelity and Goldman Sachs.
However, in this week’s ruling, Austin-based U.S. District Judge Alan Albright determined the law was too broad in how it defined a “boycott.” He also argued that it damaged free-speech protections for people who oversee the companies named in the state’s blacklist.
The American Sustainable Business Coalition (ASBC), which sued in 2024 to overturn the law, called the judge’s decision a major victory for sustainable businesses and “responsible shareholders.”
“The court has affirmed what we’ve always known: you cannot punish businesses for their investment decisions or silence those who speak about climate risk,” ASBC President David Levine said in a statement. “SB 13 cost Texans hundreds of millions of dollars, blacklisted responsible businesses and hindered progress towards a more resilient economy. We are grateful the court has put an end to this detrimental law.”
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