The last five years saw a flurry of ESG-related legislative activity. This peaked in 2023 when anti-ESG laws swept red states. However, the number of laws passed began declining in 2024. That trend continued across 2025 and into 2026. So far this year, only 14 ESG-related bills became law, marking the fewest ESG laws passed since 2021. Ballotpedia.org tracks ESG bills and gives the following summaries of the 14 laws that did pass:
- “Tennessee, Oklahoma, Indiana, Kentucky, and Kansas enacted proxy advisor disclosure laws requiring certain disclosures when voting recommendations rely on nonfinancial factors rather than financial analysis.
- Oklahoma, Mississippi, and Tennessee enacted or expanded sole fiduciary standards requiring public pension fiduciaries to base investment and proxy voting decisions only on financial factors.
- Florida and Idaho enacted restrictions on diversity, equity, and inclusion (DEI) programs, while Arizona referred a related constitutional amendment to voters for the 2026 election.
- South Carolina and Utah enacted laws prohibiting certain financial services providers or payment systems from restricting services based on ESG-related criteria.
- Illinois was the only Democratic-trifecta state to enact an ESG-related law, requiring certain insurers to participate in the National Association of Insurance Commissioners’ Climate Risk Disclosure Survey.”
Many of these laws are identical to ESG investing we’ve seen in the past. The drop-off in legislative activity may mean a couple of different things. It could mean that the culture war driving anti-ESG is losing momentum. After all, Americans have a lot on their minds these days, like the Iran war, the rising cost of living, and AI data centers. With these rising priorities, anti-ESG laws could be falling out of vogue with constituencies. Alternatively, it could indicate that anti-ESG got what they wanted from state legislatures. With many anti-ESG laws now in place, why waste political capital passing more? There is little incentive to chase more laws rather than enforcing what’s already on the books.
In addition to anti-ESG laws hitting a low, pro-ESG also passed the fewest ESG laws since 2021. However, pro-ESG laws never quite reached the heights that anti-ESG did, as anti-ESG accounts for 76% of all ESG legislation in the U.S.
Our members can learn more about the anti-ESG movement here.
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