Texas Senate Bill 13 (SB 13)

June 14, 2021

Summary

Texas Senate Bill 13 (SB 13), enacted in 2021, prohibits Texas state agencies—including pension funds and the Permanent School Fund—from investing in or contracting with companies that “boycott” fossil fuel businesses.  The law defines a boycott as any refusal to deal with, termination of business activities with, or actions intended to penalize or limit commercial relations with fossil fuel companies, unless justified by ordinary business purposes.  To remain eligible for state contracts or investments, companies must affirm that they do not engage in such boycotts.  SB 13 was introduced to shield Texas’s oil and gas industry from financial institutions and investors that apply ESG criteria in ways that reduce support for fossil fuels.  While supporters argue the law protects the state’s economic interests, critics contend it punishes companies for climate-conscious strategies and undermines free market principles.  

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