States passed 32 bills either supporting or opposing ESG investing in 2024. ESG investing is an asset management approach that considers the environment, social issues, and corporate governance practices. It’s a type of stakeholder investing, which argues shareholder returns should not be the only goal. Stakeholder investing contrasts with traditional approaches that exclusively consider financial factors like balance sheets, income statements, and valuations to maximize risk-adjusted returns (also known as shareholder investing).
Republican trifectas and states with divided governments primarily enacted legislation opposing ESG. Democratic trifectas primarily enacted legislation supporting ESG investing. 91% of all enacted ESG bills in 2024 have come from:
- Republican trifectas opposing ESG (17 bills),
- Democratic trifectas supporting ESG (8 bills), and
- Divided government states with Republican-controlled legislatures and Democratic governors opposing ESG (4 bills).
This analysis will take a deeper look at the specific reform approaches enacted in Republican and Democratic trifectas and examine which states have been the most and least active in supporting or opposing ESG this year.
Republican trifectas opposing ESG
Twenty-three states currently have Republican trifectas, and 10 enacted legislation opposing ESG in four categories this year. Of those 10 states:
- 5 enacted anti-discrimination legislation prohibiting banks and government agencies from using ESG scores (also known as social credit scores) to determine eligibility for financial services.
- 4 enacted sole fiduciary legislation prohibiting or discouraging the consideration of ESG factors in public investments (like pension funds).
- 4 enacted anti-boycott legislation prohibiting public contracts with or investments in companies that intentionally boycott certain companies or industries without a business purpose.
- 2 enacted public disclosure requirement legislation requiring additional transparency surrounding the ESG policies, investments, and considerations of state investment boards and other government agencies.
The map below shows which Republican trifecta states enacted the most types of legislation opposing ESG in 2024:
Democratic trifectas supporting ESG
On the other side, 17 states have Democratic trifectas, and four enacted legislation supporting ESG in four categories. Of those states:
- 2 enacted non-financial criteria consideration legislation requiring or allowing public fund managers to consider ESG data and other non-financial criteria in their investment strategies.
- 1 enacted industry divestment legislation prohibiting public investments in companies or industries that the government or agency considers environmentally or socially harmful.
- 1 enacted legislation requiring ESG criteria in state contracts.
- 1 enacted corporate disclosure legislation requiring corporations to disclose certain types of ESG data, such as net emissions from business operations and climate-related risk factors.
The map below shows which Democratic trifecta states enacted the most types of legislation supporting ESG in 2024:
Additional reading
For comprehensive analysis and details on divided governments, click here to read more.
To learn more about ESG, click here. For more information on areas of disagreement and inquiry related to ESG, click here.
Additionally, Ballotpedia’s Economy and Society newsletter covers developments in the world of ESG and hits inboxes every Tuesday.