Relating to the provision of proxy advisory services in connection with certain entities domiciled in this state.

HB 4079 requires proxy advisors - entities that provide voting recommendations to shareholders - to base their advice solely on financial return and risk factors, not non-financial considerations. It directly affects Texas-domiciled publicly traded companies (those organized in Texas or with headquarters there) and the proxy advisors serving their shareholders. The bill prohibits proxy advisors from considering environmental, social, governance (ESG), diversity, equity, or inclusion factors when formulating recommendations. This is implemented through new definitions and requirements added to Texas Business Organizations Code, mandating that all proxy advisory services must prioritize financial outcomes for shareholders.