Texas law aiming to restrict climate advice temporarily stays unsigned
The Texas Stock Exchange and the Texas Association of Business have joined forces to support S.B. 2337, a state law that has been the subject of a recent lawsuit. The two entities have intervened in the legal proceedings, adding a new dimension to the ongoing debate.
S.B. 2337, signed into law by Republican Gov. Greg Abbott on June 20, came into force on Monday. The law requires shareholder advisory firms like Institutional Shareholder Services and Glass Lewis to disclose to clients that advice they offer on environmental, social, or governance issues is not "solely in the financial interest of shareholders."
Institutional Shareholder Services and Glass Lewis, along with the state attorney general, have been embroiled in a lawsuit aiming to overturn S.B. 2337. The Texas Stock Exchange and the Texas Association of Business, however, have not been affected by Judge Alan Albright's temporary block on the enforcement of S.B. 2337, as they are not parties to the lawsuit.
Judge Alan Albright, a federal judge appointed to the bench during President Donald Trump's first term, issued a preliminary injunction on Friday. The decision was delivered verbally, marking a win for Institutional Shareholder Services and Glass Lewis in their lawsuit against the state attorney general.
Failure to include the disclosures required by S.B. 2337 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, have taken a stance in support of the law.
The Texas Association of Business is not mentioned as a party in the lawsuit against S.B. 2337, but is intervening to support it. Similarly, the Texas Stock Exchange is not a party in the lawsuit, but is also intervening to support S.B. 2337. The intervention of these entities adds a new entity to the legal proceedings surrounding S.B. 2337.
Judge Jeffrey C. Brown, who currently sits at the U.S. District Court for the Western District of Texas, was appointed by President Donald Trump in 2017. He has not yet made a ruling on the intervention of the Texas Stock Exchange and the Texas Association of Business in the lawsuit. The future of S.B. 2337 remains uncertain as the legal proceedings continue.
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