Legislation trying to root out environmental, social and governance investment practices in the financial sector has continued to move through state legislatures in 2025, but as in years past, few bills crossed the finish line.
Of the 106 bills introduced thus far, nine were signed into law and another is awaiting signature, according to a new report from Pleiades Strategy, a climate-focused consulting firm that tracks such legislation. The majority of state legislative sessions have concluded by now.
The count is up from this point in 2024, when 95 new bills were introduced, four of which became law.
Many anti-ESG bills aim to insulate fossil fuel industries from climate assessments that banks and state pension funds undertake to gauge long-term portfolio risks.
"These [state] policies are costly for investors, pension holders, municipalities and taxpayers," Frances Sawyer, Pleiades founder and co-author of the report, said in a statement. "It's critically important that other states, investors and companies hold the line ... and protect the right to respond to the climate crisis rationally."
Most of the bills in 2025 were reworked to limit their impact following opposition from banks and business groups, Pleiades reported.
At the same time, state treasurers and attorneys general in Republican-led states became less active on the anti-ESG front. Their engagement has become less urgent, the analysis said, because of major policy shifts under the Trump administration to dismantle climate-risk disclosures and other regulations that state officials oppose.
Pleiades also noted the emergence of new strategies, including legislation prohibiting financial firms from the "debanking" practice of rejecting certain customers that are deemed risky.
The Alliance Defending Freedom (ADF), a legal advocacy organization, created a model bill "that co-opts the language of anti-discrimination," the Pleiades report said. More than two dozen bills introduce this year were based on that model, according to the report.
"The proposal would coerce banks, credit unions, insurers and payment processors, through the threat of civil liability and government penalties, into servicing risky industries and extremist organizations — regardless of any legitimate financial risks or public harms they may cause," Pleiades said of ADF's Equality in Financial Services Act.
The Southern Poverty Law Center (SPLC) has designated ADF as an anti-LGBTQ+ hate group, the Pleiades report added. ADF disputed that characterization. In an email, the organization questioned SPLC's credibility, alleging partisanship and pointing to internal turmoil at the group.
A new law going into effect in Idaho on July 1 requires financial groups with more than $100 billion in assets to do business with any person or entity regardless of political or religious affiliation. Proponents of the bill said it would keep major banks from discriminating against customers protected by First Amendment rights. Some lawmakers opposed to the bill argued that banks operating in a free market should be allowed to reject customers with extremist views.
Idaho was the third state to pass a debanking law since 2024, after Florida and Tennessee.
A similar bill introduced in Montana died after the banking industry and the Montana Chamber of Commerce voiced opposition.
Banks "have to make decisions based on risk when they evaluate their customers or potential customers, and they have to mitigate that risk," Sam Sill, president and CEO of the Montana Bankers Association, told lawmakers in February. "That's not something that is optional."
Republicans in Congress also introduced debanking legislation this year.
