Woke movement reawakening? Bad Bunny, Texas judge may say yes
The Super Bowl halftime fiesta stirred souls and a judge's ruling is raising spirits
Anyone who watched the Bad Bunny extravaganza at the Super Bowl might conclude that the concept of diversity, equity and inclusion — wokeness for short — was far from dead in the U.S.
A recent federal court ruling in Texas would do nothing to dispel that notion. U.S. District Judge Alan Albright in Austin issued the ruling, which struck down a state law that blacklisted financial firms that used environmental, social or governance factors — so-called “ESG” issues — in making investment decisions.
The legal challenge was brought by the American Sustainable Business Council (ASBC), representing sustainable business interests, which argued the Texas law impermissibly punished businesses for their investment choices and viewpoints.
ASBC’s President and Co-Founder David Levine called the ruling “a massive win for sustainable businesses and investors,” in a press release.
“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,” Levine said. “We are grateful the court has put an end to this detrimental law.”
Discrimination Elimination Act
Texas pioneered the notion of restricting investment choices in 2021 with the Energy Discrimination Elimination Act, which required state agencies and local taxing authorities to break their ties with investment firms that refused to put money in oil and gas companies.
In his ruling, Judge Albright found the law unconstitutional under the First and Fourteenth Amendments, describing it as “facially overbroad” and “unconstitutionally vague” because its definitions could sweep in protected speech and association related to fossil fuels and ESG considerations.
The ruling is likely to push opponents of similar laws in other states to challenge their legality.
Anti-ESG action has taken a variety of forms, including laws targeting diversity efforts and the use of lawsuits.
Roadmap for challengers
Bryan McGannon, managing director at the U.S. Sustainable Investment Forum, said the ruling provides a “roadmap” for challenges to similar laws passed in Oklahoma, Kentucky, West Virginia, Tennessee and Utah.
“The ruling’s challenge to the faulty premise that climate or ESG considerations must be motivated by social or political purposes and ignores ‘ordinary business purpose’ clears the way to contest many anti-ESG laws,” he added.
Data from climate-policy advisory firm Pleiades Strategy, which tracks anti-ESG laws, shows there are currently 26 at various stages of development in U.S. states including in Alaska, Georgia, Michigan, Minnesota and Nebraska.
However, since it began tracking the bills in 2022, 391 had been killed off before making it into law.
“It is yet another court ruling protecting the freedom to invest. This should be a strong signal that the overreach of anti-ESG laws has more bark than bite,” said Frances Sawyer, founder of Pleiades Strategy.