Texas S.B.2337 enacted by the Texas legislature earlier this year imposes new disclosure requirements on proxy advisory services that provide advice or research to institutional investors on how to vote on shareholder proposals if the service bases its advice in whole or part on non-financial factors such as environmental and social goals, corporate governance, or diversity, equity or inclusion. Suit was filed this week in a Texas federal district court challenging the law on free speech and vagueness grounds. Two of the plaintiffs have a specific religious focus. A third focuses on sustainability issues. According to the complaint (full text) in Interfaith Center on Corporate Responsibility v. Paxton, (WD TX, filed 11/10/2025)
6. Plaintiff Interfaith Center on Corporate Responsibility (ICCR) is a coalition of investors who believe their faith or their values should—and as fiduciaries must—guide their investing decisions, including their investment stewardship. Plaintiff United Church Funds (UCF) is a faith-based organization that provides investment services to United Church of Christ (UCC) churches and other faith-based nonprofit organizations nationwide. Plaintiff Ceres is a nonprofit organization dedicated to the notion that accounting for sustainability is a financial imperative for companies.
The complaint goes on to contend:
7. The State of Texas can disagree with ... Plaintiffs ICCR’s and UCF’s view that their values and religious beliefs are relevant to investment-related decisions. What it cannot do is compel Plaintiffs to speak in furtherance of Texas’s views about these issues.
75. ... SB 2337’s stated goal of “prevent[ing] fraudulent or deceptive acts and practices in this state,” S.B. 2337 § 1(4), is mere pretext for regulating disfavored views, rendering the Act’s stated interest unlikely to be genuine....
80. The Act discriminates based on the content of speech and is not narrowly tailored to serve a compelling state interest and thus violates the First Amendment.
81. Because it subjects only certain speech with a certain viewpoint to rigorous regulation, SB 2337 discriminates based on viewpoint, in violation of the First Amendment. Worse, it compels private speakers to adopt and parrot the government’s viewpoint on hotly contested topics and to align with management views.
Baptist News Global reports on the lawsuit.
