SB-13 prohibits state government investment in companies that “boycott” fossil fuel-based energy companies. In the lawsuit, one group argues that SB-13 violates the Constitution.
Texas, USA — Senate Bill 13 prohibits Texas state agencies from investing in financial companies that “boycott energy companies.” The law first went into effect on September 1, 2021.
However, on August 29, 2024, the American Sustainable Business Council (ASBC) filed a lawsuit against Texas Public Accountant Glenn Hegar and Texas Attorney General Ken Paxton over SB-13.
The state defines an “energy company boycott” as follows:
“(…) without an ordinary business purpose, refuse to do business with, terminate business activities with, or otherwise act with the intent to penalize, economically harm, or restrict business relations with a company because the company (A) is engaged in the exploration, production, utilization, transportation, sale, or manufacture of fossil fuel-based energy and has not promised or committed to meeting environmental standards in excess of applicable Federal and State laws, or (B) is doing business with a company described in paragraph (A).” – Texas
The ASBC filed a lawsuit against the state alleging that SB-13 violates the First Amendment.
The lawsuit alleges that the law violates the right to free speech by “discriminating on the basis of opinion.”
The lawsuit also argues that SB-13 violates the 14th Amendment because it “encourages arbitrary enforcement and fails to give regulated entities fair notice of prohibited conduct.”
Pursuant to this law, the Texas Comptroller compiled a list of publicly traded investment companies and funds whose policies the state designated as “boycotting” fossil fuels.
As of August 2, 2024, 17 financial companies and more than 350 investment funds are blacklisted.
