Over the past few years, there’s been a lot of talk in the investing world about ESG – an acronym which stands for environmental, social and governance. It’s an investing framework that looks at how factors that fall into these categories – like climate change – pose both risks and opportunities for investors.

Recently, ESG has moved from a mainstream strategy promoted by the biggest asset managers in the world to a polarizing concept. Financial firms have scrubbed the acronym from their websites, dropped out of net-zero initiatives, and stopped advertising their climate efforts. 

The ESG backlash gained steam in 2021, when the Texas legislature passed Senate Bill 13. The law prohibits any government entity in the state from doing business with financial firms found to be boycotting — as defined by Texas — the oil and gas industry. The resulting “blacklist” of companies deemed to be working against oil and gas includes financial firm BlackRock — which, ironically, invests billions of dollars in energy companies in Texas.

This anti-ESG law, which was developed with the help of a former state legislator known as the “carbon king,” would help set off a flurry of anti-ESG legislation across the country that would lead some to proclaim ESG dead and buried.

This is an excerpt from the latest season of How We Survive. Listen to the full episode here.