State ESG Lawmaking Reaches a Five-Year Low in 2026

14 bills became law out of 174 introduced, and Democratic-controlled states enacted none supporting ESG

Middleton, Wisconsin--(Newsfile Corp. - August 27, 2026) - State legislatures have enacted 14 environmental, social, and corporate governance (ESG) bills thus far in 2026, the fewest in a single year since 2021. This represents 8% of the 174 ESG-related bills introduced, according to Ballotpedia's Environmental, Social, and Governance Legislation Tracker.

Of the bills that were not enacted, one was vetoed without an override, eight advanced to a second chamber, 79 failed, and 72 remain pending. Two bills became law (in Kentucky and Kansas) only after Republican-controlled legislatures overrode vetoes from Democratic governors.

Proxy advisers became the year's most common target
Five states Tennessee, Oklahoma, Indiana, Kentucky, and Kansas enacted proxy adviser disclosure laws in 2026, making proxy adviser regulation the single most common policy approach enacted this year. Federal district courts in Indiana and Kansas issued preliminary injunctions temporarily blocking the enforcement of these laws in those states.

Proxy advisory firms advise institutional investors (pension funds, asset managers, and similar large shareholders) on how to vote their shares at corporate annual meetings. The 2026 laws mark a shift in method.

Earlier state ESG legislation typically addressed proxy voting indirectly, through broad sole-fiduciary requirements governing how public funds must be managed. This year's laws regulate the advisory firms themselves and the recommendations they issue.

Democratic-controlled states enacted no supporting legislation
Republican-controlled state governments enacted most of the year's new laws, generally limiting the use of ESG considerations in public investments, financial services, and corporate governance. Democratic-controlled state governments enacted no legislation supporting ESG policies in 2026.

Seven years of state ESG law
Between 2020 and 2026, state legislatures enacted 155 ESG-related bills across 40 states.

• Republican trifecta states enacted 94 of them 61% of all enacted ESG legislation.
• Democratic trifecta states enacted 38.
• Divided-government states enacted 23, of which 19 opposed ESG practices and four supported them.
• Of all 155 enacted bills, 118 (76%) opposed the use of ESG-related practices and 37 (24%) supported them.
• South Dakota was the only Republican trifecta state that did not enact an ESG law during the period.

Across divided-government states, sole fiduciary standards were the most common approach, followed by public disclosure requirements and restrictions on ESG-based discrimination.

Ballotpedia's full recap of the 2026 sessions is available here, and a breakdown of enacted legislation by partisan control of state government is available here. The underlying data is available through Ballotpedia's Environmental, Social, and Governance Legislation Tracker, which follows ESG bills across all 50 states.

About Ballotpedia Legislation Trackers
Ballotpedia's legislation trackers provide a free, centralized hub (no login or sign-up required) that makes it easy to stay on top of legislation and legislative reforms across all 50 states. Founded on Ballotpedia's hallmark principle of being neutral on the issues, but passionate about the facts, our legislation trackers are updated in real time and designed to be easily searchable. Used as a go-to resource by voters, reporters, researchers, academics, and activists, they capture any bill introduced on the given topic across all 50 state legislatures and track bill movement every step of the way.

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