Sun Sentinel Palm Beach Edition
DeSantis to target what he calls ‘woke’ investment styles
TALLAHASSEE — Gov. Ron DeSantis outlined a legislative proposal Monday to expand rules to prevent state pension investments that use ratings he and other Republican leaders consider “woke.”
DeSantis said the legislation, which will be pursued during the legislative session that will start March 7, would block all investment decisions based on “environmental, social and governance” standards, known as ESG.
Republican leaders in Florida and other states have targeted ESG for taking into account issues such as climate change, racial inequality and supply chain labor standards.
In Florida, the proposal would include limiting where financial reserves are deposited and how bonds are issued by state and local governments.
The proposal also is expected to seek ways to prohibit financial institutions from using “social credit scores” and making lending decisions in a “way to try to change people’s behavior, to try to impose politics on what should just be economic decisions,” DeSantis said during an appearance at Florida SouthWestern State College.
“You are only restricted if ESG is the rule because there could be lucrative areas you’re just not going to do because of the politics of it,” he said.
House Speaker Paul Renner, R-Palm Coast, said the legislation is intended to counter asset managers at companies like BlackRock, the largest asset-management firm in the world, that he claims “take all of our money and they invest it in one narrow ideological direction. They don’t speak for your voice or mine. They speak for their voice.”
But BlackRock CEO Larry Fink, a leading proponent of ESG metrics, in a letter last year to corporate executives, said companies using the standards are “performing better than their peers.”
A Dec. 8 report from Infosys Research, an information-technology company, concluded that “increased ESG investment correlates with higher profits.”
“Many companies focus ESG efforts on the environmental segment with commitments to carbon neutrality, net zero, and reducing greenhouse gas emissions,” Infosys reported. “However, there are also opportunities to improve financial results through social and governance initiatives. Research data shows social initiatives like board diversity correlate to improved profitability.”
Last year, DeSantis, Attorney General Ashley Moody and Chief Financial Officer Jimmy Patronis, sitting as trustees of the State Board of Administration, directed pension-fund managers against “using political factors when investing the state’s money.”
A news release from the governor’s office said the proposal would stop “financial institutions from discriminating against customers for their religious, political, or social beliefs — like owning a firearm, securing the border or increasing our energy independence.”
Rep. Bob Rommel, R-Naples, will sponsor the legislation outlined Monday by DeSantis.
Sen. Ed Hooper, R-Clearwater, has filed legislation (SB 110) that would put into law a requirement for State Board of Administration evaluations to be based solely on “pecuniary factors.”