On March 25, Arkansas became the first state in the 2025 legislative session to take a strong stand against the tyranny of environmental, social, and governance systems. By passing Act 406 — originally introduced as Senate Bill 409 — the state protected its agricultural industry from politically driven discrimination and debanking by financial institutions.

The law also offers a model for other states to follow.

When access to banking, credit, loans, and insurance depends on ideological alignment, free markets no longer exist — and neither does freedom.

State Rep. Randy Torres, the Republican who sponsored the bill, explained the law’s key provisions during a House floor speech on March 20. “It does four things,” he said. “It prevents discrimination against farmers; it limits environmental, social, and governance policies; it creates a public list of financial institutions that discriminate; and it allows farmers to report discrimination.”

Torres went on to say that the new law builds on Arkansas’ 2023 legislation, Act 411, which protects the state’s energy, fossil fuel, firearms, and ammunition industries from ESG-based discrimination. Under the law, discrimination includes refusing to trade goods or services or ending existing relationships based on an entity’s involvement in those industries. Act 406 expands that protection to include agricultural producers.

To enforce the law, Arkansas maintains a public list of financial institutions found to have engaged in prohibited discriminatory practices. If an institution appears on the list and fails to change its behavior, the state treasurer — as well as state and local governments — is legally required to divest all direct and indirect holdings with that institution.

These enforcement mechanisms go beyond symbolism. They impose real financial consequences on institutions that discriminate based on ESG criteria.

How ESG threatens agriculture

Adding agriculture to Act 406 is both necessary and long overdue. ESG frameworks often apply environmental metrics that label traditional farming as harmful. These metrics target greenhouse gas emissions, land use, water consumption, and chemical fertilizer use — classifying them as “too high” by ESG standards.

Farmers routinely rely on fertilizers, pesticides, and large quantities of water to grow crops. They also need significant land and inevitably emit carbon dioxide through standard agricultural operations. Yet ESG criteria can penalize these practices by restricting access to credit, capital, insurance, or even basic financial services.

The entities behind these standards include international organizations such as the United Nations and industry groups like the Glasgow Financial Alliance for Net Zero. These groups operate without accountability to American farmers — or to American voters at all.

Much like the disastrous ESG-driven agricultural crackdowns in Sri Lanka, the Netherlands, and elsewhere, American farmers now face mounting pressure to overhaul their operations to fit a radical environmental agenda.

Bureaucrats and financial elites are restricting the use of nitrogen-based fertilizers, pushing farmers to electrify equipment, and demanding that they scale back meat and dairy production — all to meet arbitrary emissions targets. These mandates are marketed as voluntary, but the consequences of noncompliance are very real. Farmers who refuse to play along risk losing access to critical financing.

A 2023 report by the Buckeye Institute lays out the economic wreckage such policies would cause. ESG reporting compliance would raise farm operating costs by 34%, triggering massive price hikes across the board: 79% for American cheese, 70% for beef, 47% for strawberries, and 39% for chicken. Nationwide, grocery bills could climb 15%.

Arkansas lawmakers didn’t wait for a full-blown crisis. Act 406 provides a firewall, protecting the state’s farmers from ESG-based financial retaliation. It ensures they can keep producing without having to bow to a globalist agenda that punishes agriculture and drives up food prices for everyone else.

The broader scope

The attack on farmers is just one piece of a broader ESG-driven assault on Americans who don’t conform to progressive orthodoxy. Across the country, banks and financial institutions have weaponized ESG scoring to deny or restrict services — not just to farmers, but to gun dealers, fossil fuel producers, religious groups, and anyone else whose values clash with the left’s ideological agenda.

Major banks have shut down checking accounts, canceled lines of credit, and withheld insurance from perfectly legal businesses — not because of criminal behavior, but because of their industry or beliefs. Victims are often left in the dark, cut off without warning or explanation, with no real path to appeal.

This isn’t conspiracy theory — it’s documented policy. A report from Sustainalytics, an ESG firm owned by Morningstar, spells it out:

Most major banks screen their lending portfolios against specific ESG risks … and many embrace positive or negative screening. … Negative screening and norm-based screening involve the exclusion or avoidance of transactions not aligned with environmental, social, and ethical standards.

The report states clearly that ESG exclusion criteria often target industries like weapons manufacturing, tobacco, and fossil fuels. These policies result in favorable treatment for companies that support left-wing causes, while conservative and religious organizations are systematically sidelined. This kind of selective enforcement distorts the market, giving political activists in the financial sector — many of whom take direction from unelected globalist regulators — the power to impose agendas never approved by voters or their elected leaders.

This isn’t just a conservative concern. Any business, movement, or political voice that deviates from the prevailing ESG orthodoxy could be next. The implications are dangerous. When access to banking, credit, loans, and insurance depends on ideological alignment, free markets no longer exist — and neither does freedom.

That’s why laws like Arkansas’ Act 406 aren’t just helpful, they’re essential.

A blueprint for other states

By enacting Act 406, Arkansas has established a clear and effective model for defending its agricultural industry from ESG-driven discrimination. Other states should follow suit and expand these protections to safeguard all industries and citizens from political interference in the financial system.

If left unchecked, ESG will continue punishing industries essential to America’s prosperity and national security. It will undermine representative government, distort free markets, and erode individual liberty. Arkansas has drawn a firm line. Now it’s time for other states to do the same.