(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — Ready for today’s climate investing pop quiz?

How can you tell the real-world difference between:

• A “woke capitalist” who avoids fossil fuel companies because they contribute to global warming, and 
• A “Milton Friedman-loving capitalist” who avoids fossil fuel companies because he thinks they won’t beat the market?

Give up? The answer is that you can’t. Their portfolios could be identical.

Nevertheless, Florida and Texas, along with a growing number of other states, are trying to prevent the first of my hypothetical pair from doing business with their pension funds, without simultaneously preventing the second. The states are destined to fail, since there is no objective definition that can do the trick.

Consider the definition that the Texas legislature came up with when banning investment advisers from managing any state pension funds if they boycott fossil fuel companies. Section 809.001 of the Texas Government Code defines “boycott energy company” to mean:…

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