Since 2021, the Arkansas Legislature has passed more laws targeting so-called environmental, social and corporate governance (ESG) initiatives than any other state, according to a new report from public policy firm Pleiades Strategy.
The state has enacted seven anti-ESG measures, not including resolutions, since 2021. Connor Gibson, one of the reports authors, said the ESG label is nebulous, but often takes aim at climate goals, social justice initiatives and culture war targets.
Much of the legislation that has moved through statehouses in the U.S. is based on model bills propagated by right-leaning think tanks like the Heritage Foundation, he said. The bills often prohibit state entities from giving contracts to or investing in businesses proponents believe discriminate against firearm manufacturers or fossil fuel companies, for example.
Pleiades head Frances Sawyer said in an interview that anti-ESG legislation prevents companies and fund managers from considering risk factors associated with a changing climate if they want to do business with state governments.
“Climate economic shocks are here. Right-wing extremists, backed by the fossil fuel sector, have been working nonstop to undermine responsible investment practices in several states across the country under the framework of anti-ESG legislation,” Sawyer said in a press release.
“These policies are costly for investors, pension holders, municipalities, and taxpayers, and its critically important that other states, investors, and companies hold the line amid rising climate costs and risks and protect the right to respond to the climate crisis rationally.”
The climate advisory groups 2025 Statehouse Report highlighted the anti-ESG trends in legislatures across the country. Arkansas was one of the most effective states in passing such laws, said Gibson. While some states, like Missouri and Arizona, have proposed dozens of anti-ESG bills only to pass one or none, most of the legislation thats gone before Arkansas lawmakers ended up becoming law.
In 2025, “most of the 106 anti-ESG bills introduced in statehouses failed to advance, and only 9 have been signed by governors,” the report said. Two of those nine bills were passed in Arkansas. Two more bills are awaiting a governors signature in other states.
The 2025 numbers are down from 2023, which saw 165 bills introduced nationwide with 22 ultimately passing. Pleiades Strategy first began tracking anti-ESG bills in 2023.
The targets of these bills are often the large capital funds managed by state governments, such as pension funds, and state contracting, Sawyer and Gibson said. The language often prevents state agencies or pension funds from contracting or investing with any company that boycotts fossil fuel companies, firearms companies or other industries. In the bills Arkansas has passed, there are exceptions for certain situations.
Sawyer said such bills can increase costs for governments by limiting the pool of businesses it can do business with.
Act 411 of 2023 was one such anti-ESG bill that made it into law in Arkansas, sponsored by Rep. Jeff Wardlaw, R-Hermitage, who said in a House State Agencies and Governmental Affairs Committee meeting in February 2023 that it was designed “to make sure that were following our beliefs in the state and making sure that nobodys discriminating against the industries that are important to Arkansas.”
The law requires state investment funds to divest from firms that “discriminate” against certain industries, such as energy companies and firearm businesses, which are placed on a blacklist. Firms currently on the Arkansas blacklist are Goldman Sachs, TD Bank, Credit Suisse and others.
However, Arkansas became one of the only states to roll back a small part of its anti-ESG legislation in 2025 when it passed Act 252 of 2025. The new law broadened a clause in Act 411 to allow any public entity subject to the law to avoid divesting from blacklisted firms if the divestment would result in a negative financial impact.
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