A federal court has struck down a Texas law that barred state agencies from investing in or doing business with companies that take steps to reduce their dependence on fossil fuels. The ruling prevents the state from enforcing restrictions targeting environmental, social, and governance (ESG) criteria in investment and contracting decisions.
The Texas law aimed to limit financial support for firms prioritizing sustainability and climate-related goals. However, the court found that the law could not be upheld under current legal standards, allowing companies to continue their ESG-related activities without state-imposed penalties.
**Why this matters**
This decision impacts how states can regulate investments related to environmental and social policies. It also influences the broader debate over the role of ESG considerations in public sector financial decisions, potentially shaping future legislation and corporate practices.
Source: NewsData