A federal judge declared a 2021 Texas law unconstitutional. This law restricted state investment in companies boycotting fossil fuels. U.S. District Judge Alan Albright issued the ruling on February 5, 2026. He found Senate Bill 13 unconstitutional and unenforceable. The judge cited concerns with the First and Fourteenth Amendments. He described the law as “facially overbroad”. It was also deemed “unconstitutionally vague”.
Background of Senate Bill 13
Texas passed Senate Bill 13 in 2021. The goal was to discourage divestment from oil and gas companies. Financial leaders had signaled interest in climate change initiatives. The law required the Texas Comptroller’s office to list firms boycotting fossil fuel companies. These companies refuse business with such firms without an ordinary business purpose. SB 13 is often called an “anti-ESG” law. ESG stands for environmental, social, and governance factors. The law aimed to protect the state’s economy and its significant energy sector. Texas is a major energy producer.
Legal Challenge and Ruling
The American Sustainable Business Council (ASBC) filed a lawsuit. This group advocates for sustainable business practices. The ASBC argued SB 13 violated free speech rights. It also claimed violations of due process rights. The lawsuit stated the law was unconstitutionally vague. Judge Albright agreed with the ASBC. He found the definition of “boycotting” unclear. The law’s definition had three clauses. These clauses were undefined. They were not measurable by objective standards. This vagueness prevents clear understanding of prohibited conduct. The judge also noted “discriminatory enforcement” had occurred. The law’s broad scope caught protected expression.
Implications and Reactions
The ruling halts enforcement of SB 13. This decision is a significant win for sustainable businesses. David Levine of the ASBC stated the court affirmed that businesses cannot be punished for investment decisions. He also said companies cannot be silenced for discussing climate risk. The ASBC believes the law stifled free speech. It also punished responsible investments.
The Texas Comptroller’s office maintained a list of boycotting companies. This list included hundreds of firms and funds. Companies like BlackRock were previously on this list. BlackRock was removed in June 2025. This happened after it withdrew from certain clean energy initiatives. The law previously led state investment funds to divest billions of dollars. These funds included the Teacher Retirement System of Texas and the Texas Permanent School Fund. Critics warned SB 13 could harm companies that were environmentally conscious. The law reportedly cost Texas taxpayers millions in increased debt costs and lost economic activity. This news represents a significant development in the ongoing debate over ESG policies in Texas and beyond. This news story offers essential insights. This editorial covers recent news. It is a developing story.
