A federal judge has temporarily blocked Texas from enforcing a state law that could make it more difficult for the world’s largest shareholder advisory firms to provide accurate information to investors about corporate climate risks.
The decision was issued verbally on Friday by Judge Alan Albright of the U.S. District Court for the Western District of Texas, who was appointed to the bench during President Donald Trump’s first term. The ruling was a win for Institutional Shareholder Services and Glass Lewis, both of which independently sued the state attorney general to overturn the law known as S.B. 2337.
The law was signed by Republican Gov. Greg Abbott on June 20 and came into force on Monday. It requires Institutional Shareholder Services, Glass Lewis and other advisory firms to disclose to clients that advice they offer on environmental, social or governance issues is not “solely in the financial interest of shareholders. Failure to include those statements could result in fines of $10,000 per violation.
The Texas Stock Exchange, a national trading platform preparing to launch early next year, and the Texas Association of Business, a local trade group, jointly intervened in the cases to support the law.
