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In a countermove to Biden administration SEC efforts to begin mandating climate-related financial disclosures, Texas’s Republican-controlled state government passed a law Monday prohibiting state financial institutions from investing in businesses that boycott fossil fuels.

The law defines such boycotting as “refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company” is either involved in the fossil fuel industry, or does not commit to meeting “environmental standards beyond applicable federal and state law.”

The law contains a carveout exemption for cases where its application would be inconsistent with a state financial institution’s fiduciary responsibilities.

Texas’s law is the latest effort by fossil-friendly American lawmakers to push back against the increasing popularity of ESG investing and climate-related financial disclosure expectations. Last year, the Trump administration’s Labor Department rapidly pushed through a rule forbidding private industry pensions from investing in ESG vehicles if doing so would prioritize non-financial objectives over purely financial ones. In March 2021, the Biden administration’s Labor Department released a policy statement clarifying it would both not enforce the rule and look to revise it.

Though no anti-ESG law merits celebration, the fact that Texas, a state famous for its oil industry, felt it necessary to pass a law of this sort signals the industry’s growing consternation with an increasingly climate-conscious and oil un-friendly investing environment.