This year, 10 state legislatures passed a total of 11 bills attacking financial institutions’ ability to consider climate risk and other ESG factors, according to the 2025 Statehouse Report by research and advisory firm Pleiades Strategy. But the bark of these bills is louder than their bite, the firm said.
The bills were passed in Arizona, Florida, Idaho, Kentucky, Missouri, Ohio, Oklahoma, Texas, West Virginia and Wyoming. A total of 106 such anti-ESG bills were introduced in state legislatures in 2025, and the low success rate reflects states’ experiences with the financial costs of previous years’ restrictions, per the July 1 report.
Even those that did pass were watered down or equipped with escape clauses that weaken their impact, according to Pleiades.
For example, Arkansas House Bill 1507, which prohibits state universities and government institutions with a charitable purpose from considering ESG or DEI in their investment decisions, contains an escape clause if the restrictions result in a “materially financial impact.”
“This is trying to politicize and saber-rattle around good risk-management practices that go against the interest of preferred industries, like big agriculture and fossil fuel,” Frances Sawyer, founder of Pleiades Strategy and co-author of the report, told ESG Dive in an interview.
The result is a “rhetorical environment” that leads to companies “greenhushing” their ESG efforts, Sawyer said, but added that leaders are still closely considering climate risk and other ESG issues in the board room. “The folks that we talk to across sectors are eyes wide open,” she said. “Climate risk is a financial risk.”
The successful bills were largely supported by lobbying efforts from fossil fuel industry players, according to the report. This mostly took place indirectly via organizations funded by the fossil fuel industry, like the American Legislative Exchange Council or The Heritage Foundation.
In the case of Texas’ Senate Bill 2337, oil giant ExxonMobil lobbied for the law directly. The bill specifically prohibits proxy advisors from making judgments based on ESG and DEI. Last week, major proxy advisory firms Glass Lewis and ISS sued Texas in federal court, claiming a violation of the First Amendment right to free association and its prohibition on viewpoint discrimination.
The outcome “will shape the conversation,” Sawyer said. The law, “curtails the rights of folks to use real risk analysis in decision making, and to be honest about what those risks are,” she added.
Anti-ESG efforts at the state level have also been initiated from treasurers, attorneys general, and secretaries of state, who have taken 134 such actions since 2018, according to the report. These actions largely consisted of sending letters, in 58 cases, along with proposing new rules, divestment, and legislation. State executives have only taken 21 actions since May 2024, in part because of the federal government’s reversal on issues such as climate reporting, per the report.
Pleiades found that since 2021, 482 anti-ESG bills and resolutions have been introduced in 42 states, and 21 states have signed 52 anti-ESG bills and resolutions into law. Meanwhile, Europe and California have moved forward with climate disclosure laws that large companies will be obliged to comply with anyway.
“The backlash … is trying to put speed bumps in a road that we are going down,” Sawyer said.
The report comes on the heels of several recent findings that point to anti-ESG laws — introduced in right-leaning states like Texas, Florida and Oklahoma — having an adverse economic impact and being unpopular among states’ voters.
A 2024 report from United Nations-backed Principles for Responsible Investment analyzed how anti-ESG laws affect financial institutions’ business operations and found that such efforts could have “significant unintended consequences, fail to achieve their goals, or both.”
