On November 10, United Church Funds (UCF), the Interfaith Center on Corporate Responsibility (ICCR) and Ceres filed a lawsuit to block broad enforcement of a new Texas law that threatens investors’ ability to receive expert, values-aligned guidance.
The law, known as SB 2337, restricts how investment advisors and nonprofit organizations can discuss environmental, social or governance (ESG) factors with shareholders or members. These considerations —essential to assessing long-term financial risk — are core to the mission-driven investing practiced across many faith- or values-based institutions, including UCF.
The lawsuit, filed by Democracy Forward on behalf of the three plaintiffs, argues that SB 2337 violates the First Amendment’s free speech protections by requiring organizations serving investors to state that consideration of values is “nonfinancial” and that the advice is “not solely in the financial interest of the company’s shareholders.” The complaint also argues that the law is unconstitutionally vague, leaving organizations without clear guidance on how to comply.
Faith-based investors, such as UCF, have long integrated environmental impact, social responsibility and corporate governance into their investment analysis — not only as expressions of moral conviction, but because these factors materially shape long-term financial performance.
“Our approach to investing has always joined faith and fiduciary duty,” said Charles Buck, President and CEO of United Church Funds. “Texas’s law is written so vaguely that even ordinary, good-faith stewardship could be misinterpreted as unlawful. Responsible investors shouldn’t have to guess whether sharing our values or our analysis puts us at risk for simply doing our jobs.”
Democracy Forward President and CEO Skye Perryman emphasized that withholding critical investment information harms communities and investors alike. “Hiding the truth about important long-term aspects of their investments is a disservice to investors,” she said. “Our team is honored to work with ICCR, United Church Funds, and Ceres to defend the right to speak about investments and exercise shareholder rights in Texas.”
As the case proceeds, UCF remains committed to transparent, responsible investing that reflects the values of the United Church of Christ while stewarding the long-term financial goals of its clients.
Read the full press release here.
The filed complaint is available here