Policies

In 2024, Freedom to Invest and our allies tracked 161 pieces of legislation that were introduced or carried over from 2023 that would restrict investors and companies from considering all material financial risks in decision-making. Of these 161 proposals, only 6 were signed into law. The proposals range from policies that would prohibit pension funds from considering sustainability factors to policies that would prohibit contracts with companies who have so called “boycotted” fossil fuel companies. There is also a growing effort to prohibit insurance companies from considering climate risk in their underwriting decisions despite the clear risk-management responsibility of the industry. 

On the federal side, congressional lawmakers introduced several bills, including one U.S. House proposal that would impede shareholder rights to engage companies they own on climate risk through proxy voting. Unfortunately, these proposals passed the House of Representatives in 2024, but they did not advance in the Senate. Shareholder proposals are a mechanism by which investors engage in meaningful dialogue with companies on material issues such as risk management, executive compensation, and board independence.  These proposals have led to the wide adoption of strategic goals, strong governance practices, and workforce policies that are now widely regarded as essential for long-term value creation.  

The good news is many of these legislative efforts have fallen flat in part due to the private and public sectors and even conservative pushback. They have failed amid concerns over the hundreds of millions of dollars in additional taxpayer costs such policies would result in and the growing wariness over the government interfering with businesses’ freedom to invest responsibly. Restrictive bills in Colorado, Georgia, Iowa, Maine, Mississippi, Missouri, Nevada, South Dakota, Tennessee, Virginia, and Wyoming have failed in their respective state legislatures.

In other states, such as Illinois and Oregon, legislatures have passed policies to explicitly protect businesses' right to consider climate risks and other material factors. And California passed a first-in-the-nation law that gives investors, consumers, employees, and other stakeholders more insight into companies’ efforts to manage climate-related financial risks. The U.S. Securities and Exchange Commission is considering a similar proposal, responding to investors and consumers alike who have been making the case for improved transparency for decades. 

However, 30 restrictive laws have been passed since 2022. Among them is a law that bans states and financial institutions from investing in strategies that consider material financial factors for any purpose other than maximized investment returns. Other laws are inclusive of so-called blacklist laws that ban financial institutions from doing business with the state if they are deemed by elected officials to utilize responsible investing principles. In 2025, the legislation has grown into other sectors including insurance, utilities, banking, and others.  Through administrative actions and attempts in Congress, we expect the campaign to protect responsible investing and business decision-making to continue for the foreseeable future. Freedom to Invest, along with our many allies are prepared to push back on these harmful policies.