It is tempting to say that the blue tsunami – which has seen the Democrats projected to win control of the US Senate and House of Representatives – spells the end of the Republican-driven anti-ESG crusade. Ken Paxton, the attorney general who did more than anyone to take the fight over ESG into the courts, lost his race for the US Senate to James Talarico on Tuesday night, and the office he vacated to run will pass to a Democrat for the first time since 1994. He was not alone. Of the Republican attorneys general who have led legal action against asset managers, proxy advisors and climate data providers, three have been replaced by Democrats, in Texas, Iowa and Georgia, and a fourth, in Kansas, is too close to call. The political machinery assembled to pressure investors and their research providers has not taken a blow like this since the campaign began.

The honest answer to whether the anti-ESG crusade is over is no, or not yet. The laws remain on the books, most of the legislatures that passed them are still Republican, the federal agencies pressing the executive side of the campaign are untouched by the midterms, and the outgoing attorneys general keep their powers until January. What Tuesday changed is who decides which cases to bring, which to keep defending and which to quietly drop, in several of the states that mattered most, and who holds the gavels in Washington. A crusade is hard to end at the ballot box. It can, however, be starved of enforcers, and that is what has now begun.

The attorneys general who are leaving

Texas matters most. In November 2024, Paxton led eleven Republican states in suing BlackRock, State Street and Vanguard in federal court in east Texas. The states allege that the three managers built large stakes in US coal producers. They then allegedly used those stakes, and their membership of climate alliances such as Climate Action 100+, to press the companies to cut output, pushing up energy prices in breach of federal and state antitrust law. The managers deny this and say they were acting as ordinary shareholders. The court refused to dismiss the case in August 2025, and Vanguard later settled for U$29.5 million.

Paxton also sued ISS over its voting policies, Glass Lewis over allegedly misleading clients and is defending SB 2337, the state's proxy advisor law. His successor, Democrat Nathan Johnson, is a Dallas state senator and corporate litigator who has promised to concentrate on consumer protection, anti-corruption and child support. He has not said publicly what he will do with Paxton's ESG cases, but the levers he inherits are concrete. A new attorney general can decline to appeal the injunction against SB 2337, settle or drop the ISS suit, withdraw outstanding civil investigative demands, and pull Texas out of the multistate actions its office has been leading. None of that needs the legislature's consent.

Iowa may matter almost as much. Republican Brenna Bird conceded to Nathan Democrat Willems. Five days before the election, Judge Jeremy Kernodle trimmed the coal case but let Iowa and Nebraska continue with claims brought on behalf of electricity consumers. Iowa also joined Texas, Nebraska and West Virginia in suing ISS in May. Half of the surviving coal claims, and two of the four states suing ISS, will soon be in Democratic hands.

In Georgia, Tanya Miller won the seat vacated by Chris Carr, a regular signatory of the multistate letters warning financial firms off ESG. In Kansas, Chris Mann has claimed a narrow win over Kris Kobach, who has not conceded. Kobach is currently defending the Kansas proxy advisor law in federal court. Virginia changed hands a year earlier, when Jay Jones beat Jason Miyares.

Two of the most active offices held on. James Uthmeier was re-elected in Florida, a week after suing the climate risk modeller First Street under consumer protection law and calling its flood scores "marketing fear". Mike Hilgers was re-elected in Nebraska, which is suing First Street and ISS, and is the other surviving plaintiff in the coal case. Indiana, Kentucky, Missouri and West Virginia, all active in this area, had no attorney general on the ballot.

The courts got there first

The proxy advisor laws were already in trouble before anyone voted. Federal judges have now blocked them in four states: Texas in August 2025, Kansas and Indiana in June this year, and Oklahoma on 31 October, the day before its law took effect. The later laws dropped the explicit references to ESG and DEI that made the Texas statute vulnerable. Instead, they impose disclosure and analysis duties only when an advisor recommends voting against management. Every court has found that this picks a side. In the Oklahoma judge's words, the law's preference “is for agreement with management, regardless of the underlying issue”.

The states' case deserves to be stated fairly. Legislators said advisors market themselves as serving shareholder value while sometimes recommending on non-financial grounds, and that investors should know when that happens. The courts accepted that protecting investors from being misled is a legitimate aim. They found that the laws did not serve it. The Indiana court found no evidence that any client had been misled, and observed that the effect of proxy advisors on shareholder value "is not a settled topic". Nor did any state explain why advice that agrees with management is less likely to mislead than advice that disagrees.

Taken together, the rulings identify six defects. First, the trigger takes a side. The duties apply only to advice that departs from management, and every court has treated that as viewpoint discrimination, the most serious kind of restriction on speech. Second, the speech is protected. Kansas and Oklahoma held that voting advice is the research clients pay for, not advertising, and Oklahoma rejected the idea that advice about shares is a special category the state may regulate freely. Third, the required statements are not neutral facts. Indiana found the statutory “written financial analysis” is itself a matter of opinion, so an advisor could do real financial work and still be made to say it had not. Fourth, the evidence is missing: no state showed that any client had been misled. Fifth, the fit is poor, because the duties apply whether an advisor describes its methods accurately or not, and even when the prescribed analysis exists. Sixth, the defect cannot be cut out. Removing the “against management” trigger would create a broader law than the legislature passed. The Texas law, which named ESG and DEI, faced the further charge that those terms are too vague to comply with. In 2024, a federal court in Missouri struck down state rules requiring scripted warnings before advisors pursued "nonfinancial" objectives, finding them to be compelled speech.

The challenges are also widening. On 30 October, the Interfaith Center on Corporate Responsibility, United Church Funds and Ceres sued Kentucky over its version of the law. It is the first such case brought by investors rather than advisors.

What the election does not change

A new attorney general can drop a lawsuit but cannot repeal a statute. The proxy advisor laws, the anti-boycott laws and the pension rules stay in force until legislatures change them, and most of those legislatures remain Republican. Texas and Oklahoma also let private parties sue advisors. The court orders bind only the attorney general, so a company whose management lost a vote can still bring a claim.

The injunctions also protect only the two firms that sued, ISS and Glass Lewis. Every other proxy advisor, including smaller independent firms like ours, remains formally covered in each of these states until a court rules more broadly. That is how a disclosure law can chill speech without ever being enforced.

The coal case does not depend on Texas either. Nebraska keeps its claims whatever Iowa and Texas decide, and the Justice Department and Federal Trade Commission have already filed in support of the states. Florida and Nebraska will press on with their cases against First Street.

The outgoing attorneys general also keep their full powers until they hand over in January. New lawsuits, investigative demands or settlements filed before then would leave their successors to deal with them, so the next two months deserve close attention.

Washington: new gavels, same agencies

If Democrats take control of Congress in January as projected, Republicans lose the committee chairs that drove the federal side of the campaign. The House Judiciary Committee under Jim Jordan spent two years investigating what it called a "climate cartel" of asset managers and investor alliances. Bills such as the proposal to bar states and cities from bringing climate cases now look unlikely to pass.

The clearest casualty may be the newest inquiry. On 28 October, Ted Cruz, as chairman of the Senate Commerce Committee, opened a probe of ISS and Glass Lewis after both firms recommended against proposals to reincorporate companies in Texas, asking whether they were putting political objectives ahead of their clients' financial interests and whether their conduct breached antitrust or consumer protection law. When the new Senate is seated in January, Cruz loses the Commerce gavel, and the inquiry loses the committee behind it. An investigation barely a week old now has a short shelf life.

Control of Congress also cuts the other way. Democratic chairs could turn the investigative lens around and examine how the anti-ESG campaign itself was organised, funded and coordinated, although that is a possibility rather than an announced plan. The Senate's power over confirmations also gives Democrats leverage over future appointments to the agencies and courts deciding these disputes, though that leverage only bites when a seat opens.

The executive branch is unchanged. In December 2025, Executive Order 14366 from President Donald Trump directed three federal agencies to review the rules on proxy advisors and shareholder proposals. The SEC has since proposed rescinding Rule 14a-8, the rule that lets qualifying shareholders put a proposal on a company's ballot. I have written about what that would mean for ordinary owners. Minerva has also published a briefing examining the risks of the rescission, while investors have warned against the proposal.

In October, the SEC also closed its investigation of Climate Action 100+ members without enforcement action, though it warned that coordinated engagement could make investors a "group" with disclosure duties under securities law. A Democratic Congress can hold hearings on these moves but cannot direct the agencies.

What to watch

In the short term there are five things to follow:

• whether outgoing offices file new cases or settle existing ones before January;

• what Texas’ Johnson and Iowa’s Willems do with the coal case and the ISS suits;

• the final count in Kansas, and whether a new attorney general keeps defending its law;

• any appeal in the Tenth Circuit, which covers both Kansas and Oklahoma and would be the first appeal court ruling on these laws;

• and the Florida and Nebraska cases against First Street, which test whether a state can treat a private climate model as consumer deception because it departs from official flood maps.

The bigger point concerns how independent analysis is treated. Over the past three years, the tools used against ESG have been consumer protection, antitrust and disclosure law. Each treats disagreement as a possible deception: disagreement with company management, with official data, or with the view that only short-term financial return counts. Elections change who uses those tools. The courts have begun to decide whether they survive, and so far they have sided with the right to disagree.