The Playbook
The SFOF network executes a sophisticated, multi-stage campaign. This "inside-outside" game combines public pressure with direct legislative and administrative action to systematically reshape state financial policy.
Phase I: The "Outside Game"
Manufacturing public and corporate pressure to create a pretext for government intervention.
Play #1: The War by Letter
The network's primary tool for applying external pressure is the coordinated, multi-state letter campaign. SFOF members and allied Attorneys General use official government letterhead to publicly threaten and shame corporate targets, creating negative media attention and signaling a unified political front.
Key Targets & Tactics:
- Threatening the Banking Industry: A foundational letter warned the entire U.S. banking industry of "collective action" for "boycotting" fossil fuel industries.
- Attacking Market Gatekeepers: A letter to S&P Global demanded the withdrawal of its ESG credit indicators, threatening antitrust investigations.
- Targeting Asset Managers: A letter accused BlackRock of "mixed motives," establishing the legal narrative for future lawsuits and divestments.
Phase II: The "Inside Game"
Weaponizing the levers of state power to translate manufactured pressure into binding policy.
Play #2: Legislative Capture
The network uses a legislative pipeline to pass model bills drafted by ALEC and The Heritage Foundation, often with nearly identical language across multiple states.
Track 1: Anti-Boycott Laws (ALEC)
Prohibits state contracts with companies that "boycott" favored industries. Enacted in states like Texas and Alabama.
Track 2: Redefining Fiduciary Duty (Heritage)
Legally redefines fiduciary duty to require "only pecuniary factors." Enacted in Florida and Kentucky.
Play #3: Administrative Action
SFOF members use the direct authority of their offices to punish firms and seize control of corporate governance.
Punitive Divestments
High-profile divestments from BlackRock in Florida ($2B) and Missouri ($500M) sent a warning to the asset management industry.
Seizing the Proxy Vote
Stripping proxy voting authority from external managers (pioneered in Missouri) and hiring ideologically-aligned proxy advisors (seen in Kansas and Arkansas).
Emerging Trends
The anti-ESG movement is dynamic, with new tactics emerging in the 2025 session.
Confronting International Regulation
A notable new development is the explicit pushback against global sustainability standards. New Hampshire's HCR9 urges the U.S. to reject compliance with the European Union's Corporate Sustainability Due Diligence Directive (CSDDD).
Rhetorical Escalation
Bills are increasingly linking voluntary ESG principles to the concept of a "Social Credit Score." Minnesota's SF851 explicitly includes this language, a potent tactic designed to frame ESG as a threat to individual liberty.
Proactive Litigation Support
Wyoming's SJ0011, "Supporting anti-ESG litigation," indicates a shift towards a more aggressive legal posture, suggesting states may actively fund lawsuits challenging federal regulations or private-sector ESG initiatives.
The Endgame: The "Fiduciary Trap"
The ultimate goal is to create a new legal reality where prudent risk management becomes a fiduciary liability.
Inverting Legal Liability
The traditional "prudent person" rule requires a fiduciary to consider all material financial risks, including long-term threats like climate change. The new "pecuniary factors only" laws, as enacted in states like South Carolina and Indiana, flip this standard on its head.
Under these new laws, the very act of considering a climate-related risk can be legally framed as pursuing a prohibited "political" or "environmental" goal. A fiduciary is thus trapped: ignore a material financial risk and breach their traditional duty of care, or consider that risk and face potential litigation for violating the new state law. This engineered legal uncertainty is designed to produce a chilling effect.