Florida Governor Takes Aim at 'Ideological' Investing
Gov. Ron DeSantis wants to prohibit state investments that use "environmental, social and governance" ratings, which can include taking into account impacts of climate change.
July 29, 2022 at 12:58 PM
5 minute read
State and Local GovernmentContinuing to target what he calls "woke" corporations, Gov. Ron DeSantis wants to prohibit state investments that use "environmental, social and governance" ratings, which can include taking into account impacts of climate change.
DeSantis plans to have the State Board of Administration, which oversees investments, direct pension-fund managers against "using political factors when investing the state's money." So-called ESG policies have drawn criticism from Republicans across the country.
"We want them [fund managers] to invest the state's money for the best interests of the beneficiaries of those funds, which is, again, the people that are retired cops and teachers and other public employees," DeSantis said Wednesday during an appearance at Harpoon Harry's Crab House in Tampa.
DeSantis also intends to work during the 2023 legislative session with incoming House Speaker Paul Renner, R-Palm Coast, to put into law ESG prohibitions.
ESG practices can involve considering a wide range of issues in investments, such as companies' climate-change vulnerabilities; carbon emissions; product safety; supply-chain labor standards; privacy and data security; and executive compensation.
The organization DeSantis Watch, a joint project from Florida Watch and Progress Florida that is critical of the governor, issued a statement Wednesday that said DeSantis' proposal does "the bidding of his large corporate donors and billionaire supporters."
"Florida is ground zero for the climate crisis, but once again Ron DeSantis lacks the courage to take any real action to protect the livelihoods of the people of our state," Natasha Sutherland of DeSantis Watch said.
DeSantis, Chief Financial Officer Jimmy Patronis and Attorney General Ashley Moody, who are trustees of the State Board of Administration, are scheduled to meet during an Aug. 23 Cabinet meeting.
Managers oversee about $250 billion in assets, investing money from the Florida Retirement System and 25 other funds, while also overseeing the Florida Hurricane Catastrophe Fund, a major reinsurance program.
Patronis in June also targeted investments that involve ESG ratings. At the time, Emilie Oglesby, a spokeswoman for the State Board of Administration, said in an email that, "as fiduciaries, the SBA and its investment managers are required to take all relevant risks into account when making investment decisions."
Oglesby added that, "Neither the SBA nor its managers use ESG factors as a way to screen or limit the available investment opportunity set."
Backing DeSantis on Wednesday, Tina Descovich, co-founder of the conservative group Moms for Liberty, said her organization and some members have had accounts frozen by PayPal.
"In a day and age of canceled culture, where parental-rights groups are being designated as domestic terrorists by our own United States Department of Justice, the cancellation of our financing by major organizations just seems like the next step in these draconian policies," Descovich said while at Harpoon Harry's.
On its website, PayPal said building "a more financially inclusive and interconnected world is the foundation of our values-led culture, which is grounded in Inclusion, Innovation, Collaboration and Wellness across our communities, workforce and strategies."
PayPal said its ESG strategy expands on a mission "to promote financial wellness and to empower those who are underserved by the financial community."
DeSantis said corporations are being overrun by activist employees, who "believe they're entitled to have their employer basically emote the same political values as they do."
"The problem is that, then the inmates are running the asylum," DeSantis continued.
Patronis in a June letter to the SBA called the practice "anti-American, anti-Israel, and anti-freedom ideology, that's disguising itself as a sophisticated business practice."
During the event at Harpoon Harry's, Renner supported DeSantis' call, saying "global elites" are "weaponizing American capitalism against us."
Renner, who will become House speaker after the November elections, called the corporate practices a national-security issue and a pocketbook issue.
"What we have is these large corporations and banks that are pursuing a woke agenda that is artificially driving up our costs in energy," Renner said. "There's a reason why we haven't built new refineries. There's a reason why we're not drilling for oil even though we have more reserves in this country than any other place in the world, it's because the banks and this woke agenda is choking off their ability to get financing to do that."
DeSantis said ESG is a being used by "upper echelons of our society" to impose a "woke ideology on the economy."
"We don't want to see the economy further politicized, and we want to push back against the politicization that's already happened," DeSantis said. "Our investment of funds should be for the best interest of our beneficiaries here in the state of Florida, it should not be a vehicle to impose an ideological agenda."
The state is embroiled in lawsuits over a new law that restricts race-related workplace training and classroom instruction, dubbed by DeSantis as the "Stop WOKE Act."
In one of the cases, businesses contend the law violates their ability to discuss issues such as racism and implicit bias with employees. State officials have described the law as preventing "indoctrination."
Jim Turner reports for the News Service of Florida.
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