A bill in Texas died this week that would have shifted the burden of proof to corporations when shareholders bring a suit claiming ESG (Environmental, Social, and Governance) considerations were used in decision-making that financially harmed the company. This additional legal burden would have added more pressure to major Wall Street firms that have already begun to retreat from ESG investing frameworks.

States like Oklahoma and Texas have pushed back on ESG investing through legislation such as the Oklahoma Energy Discrimination Elimination Act (EDEA), which restricts the use of public pension funds for purposes that deviate from strict fiduciary duty.

While some critics claim that EDEA has raised borrowing costs for municipalities, economists Vance Ginn and Byron Schlomach published a detailed report finding flaws in the critics’ statistical analysis as well as a failure to take into consideration the negative effects ESG policies have on Oklahoma as a whole.

Additionally, OCPA has released its own report which argues that ESG investing often violates the fiduciary responsibilities of asset managers by prioritizing ideological goals over financial returns. This approach puts public pension holders at unnecessary financial risk and undermines taxpayers with their own tax dollars. Collectively, these findings reinforce the need for legislation like EDEA, ensuring that public investment decisions remain focused on financial performance, not political agendas.