On April 7, 2026, the Oklahoma Supreme Court ruled that the Oklahoma Energy Discrimination Elimination Act of 2022 is unconstitutional when applied to the Oklahoma Public Employees Retirement System (OPERS). The court also issued a permanent injunction preventing state Treasurer Todd Russ (R) from enforcing the law against OPERS. The ruling upheld a 2024 Oklahoma County District Court ruling that temporarily blocked enforcement of the law.

The 2022 law required the state treasurer to compile a list of financial companies that boycott energy companies and directed state entities to divest from those firms. Writing for the majority, Justice James Edmondson said the law violated constitutional provisions requiring the OPERS Board of Trustees to fulfill its duties solely in the interest of the participants and beneficiaries. Four justices concurred with Edmondson's opinion, three dissented, and one recused.

The ruling removes legal restrictions that would have forced Oklahoma's public pension system to divest from major financial firms based on their energy sector policies. OPERS had determined that complying with the law would cost millions of dollars. Companies on the treasurer's list of restricted financial companies controlled 64% of the system's assets, according to the Supreme Court opinion.

Justice Edmondson wrote that the Oklahoma Constitution requires retirement system funds to be managed for a single, exclusive purpose — providing benefits and related financial management for members. The Energy Discrimination Elimination Act introduced a second, competing objective by requiring divestment based on whether financial firms boycott energy companies.

The court held that this created an impermissible second objective for investment decisions. The court said the law was "unconstitutional in its entirety when applied to OPERS because it conflicts with Okla. Const. Art. XXIII, §12."

The case originated when Oklahoma Public Employees Association President Don Keenan filed suit in 2023, alleging the law forced pension systems to drop fund managers at a cost to retirees. Keenan has since died. The district court found in 2024 the law conflicted with the retirement system's constitutional duty to act solely for members' benefit.

The Oklahoma Supreme Court is nonpartisan, but all nine current justices joined the court through gubernatorial appointment. As of 2026, six were appointed by Republican governors and three by Democratic governors.

The Oklahoma law was part of a broader push by Republican-controlled states to counter ESG investing practices. The State Financial Officers Foundation, a Kansas nonprofit promoting anti-ESG legislation, supported the Oklahoma measure. According to Ballotpedia, 22 of the 23 Republican trifecta states enacted legislation opposing ESG between 2020 and 2025, along with three of the 12 states with divided governments.

In February 2026, a U.S. district court invalidated a similar 2021 Texas law, Senate Bill 13, ruling it violated First and Fourteenth Amendment protections. Analysts said the Texas ruling provided a legal roadmap for challenging comparable state laws.

Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.