Ron DeSantis Announces Crackdown on ESG Investments Using State Funds

Florida Governor Ron DeSantis announced a series of new proposals on Monday aimed at cracking down on the use of so-called Environmental, Social, and Governance criteria in investment decisions involving state and local funds.

© Marco Bello/Reuters
Governor Ron DeSantis speaks as he celebrates onstage during his 2022 U.S. midterm elections night party in Tampa, Florida, November 8, 2022.

The ESG movement promotes an investment discipline which emphasizes not just financial returns, but also grades companies on things such as their ethics, board diversity, political donations, and sustainability efforts. Speaking during a press conference in Naples on Monday, DeSantis defined ESG as a “mechanism to inject political ideology into investment decisions, corporate governance, and really just the everyday economy.”

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As part of the proposed legislation DeSantis unveiled was a plan to codify into statute a resolution enacted last year that prohibited ESG investing in pension funds for state and local government employees, including firefighters, police officers, and teachers.

The proposed legislation would restrict banks that hold public funds – known as qualified public depositories – from utilizing ESG in in their investment decisions. Investment firms that engage in ESG would also be barred from being lenders to the state or to local governments.

The legislation would prohibit the state from providing ESG-related information to the credit-rating agencies that rate Florida’s ability to fulfill its debt obligations. And the state is seeking to enact protections for Floridians against discrimination from big banks based on their religious, political, or social beliefs, DeSantis said.

DeSantis said domestic energy production is a prime target of ESG. By disincentivizing investments in oil and gas and “constricting the ability to invest your money,” ESG violates the fiduciary duty that financial institutions have to shareholders to generate the highest return on investment, DeSantis said.

DeSantis said ESG mimics the social-credit score system that the Chinese Communist Party employs. He also slammed the U.S.’s dependence on China for manufactured goods. “We need to recapture all the supply chains and get them out of China and bring them back here,” he said. During the pandemic, many commodities Americans needed were produced by China.

ESG does not enjoy popular support, DeSantis said, and is instead a top-down “elite-driven phenomenon” spearheaded by globalist “jet setters,” such as those who attended the World Economic Forum in Davos, Switzerland last year. At the international conference, Alibaba Group president J. Michael Evans bragged about the development of an “individual carbon footprint tracker” that can surveil what people buy, what they eat, and where and how they travel to gauge individual contributions to climate change.

“I don’t know where this stuff comes from but the elites grab it and they really want to impose it on the rest of us,” DeSantis said. “They don’t have the persuasive ability to get this done through the democratic process.”

Florida House Speaker Paul Renner said that some of the nation’s largest asset managers have gone all-in on ESG and are using their size and influence to force businesses to comply with it.

“They will engage with CEOs and with boards across the country among our American companies to dictate to them, because of their shareholder dominance, what polices they will adopt, how their board will be constructed, what they will do on any number of issues, like abortion, and things that have nothing whatsoever to do with that company,” Renner told National Review.

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