A Texas District Court judge has struck down the state’s “business blacklist law,” ruling that the law requiring state entities to divest from financial companies deemed to be “boycotting” fossil fuel companies was unconstitutional.
Passed in 2021, the blacklist law, Senate Bill 13 (SB 13) formed part of an anti-ESG movement in Republican states – which has picked up significant momentum since the election of President Trump – with Texas consistently at the forefront. Texas is the largest net energy supplier in the U.S., providing nearly a quarter of the country’s domestically produced energy, and accounting for over 40% of the nation’s crude oil proved reserves and production, according to the U.S. Energy Information Administration (EIA).
The law barred state pension plans and other state funds from investing in financial companies that “boycott” fossil fuel companies, as well as barring public contracting at the state and local level with companies that “boycott” fossil fuel companies.
As part of the law, the State the Comptroller is required to maintain and update a “list of financial companies that boycott energy companies,” and to give companies 90 days to “cease boycotting energy companies in order to avoid qualifying for divestment by state governmental entities.” The most recently updated list included AMP, BNP Paribas, Credit Agricole, Danske Bank, HSBC, Impax Asset Management, Jupiter Fund Management, NatWest, Nordea Bank, Rathbones, Schroders, Societe Generale, Svenska Handelsbanken, Swedbank and UBS, in addition to hundreds of individual funds.
BlackRock, one of the first included on the list, was removed in June 2025, after the asset management giant exited climate-focused investment groups and updated its energy investment policies.
The judgement follows the filing of a lawsuit by the American Sustainable Business Network (ASBN) in 2024, challenging the law on constitutional grounds, arguing that the law violated protected free speech and due process, and that the law was “unconstitutionally vague” and overbroad.
In his ruling Judge Alan Albright granted the ASBN’s motion for partial summary judgment, declaring the law unconstitutional. The judgement stated:
“SB 13 is impermissibly vague in violation of the Fourteenth Amendment because it fails to provide persons of ordinary intelligence a reasonable opportunity to know what conduct is prohibited and does not provide explicit standards for determining compliance with the law. Thus, the law is unconstitutional and unenforceable.”
In a statement released following the ruling, David Levine, President and Co-Founder of the American Sustainable Business Council, said:
“This is a massive win for sustainable businesses and investors, for responsible shareholders in Texas, and for freedom. 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. SB-13 cost Texans hundreds of millions of dollars, blacklisted responsible businesses, and hindered progress towards a more resilient economy.
