Tallahassee - Tuesday August 23, 2022: At Governor DeSantis' urging, the Trustees of the State Board of Administration (SBA) passed a resolution Tuesday directing Florida’s fund managers not to consider "social, political, or ideological interests" when making investment decisions.
Some fund managers have begun applying these non-financial factors in their investment decisions. The trend is known as ESG, which stands for Environmental, Social, and Governance.
The resolution directs Florida's state pension fund managers to invest state funds "in a manner that prioritizes the highest return for Florida’s taxpayers and retirees, without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement. "
The resolution updates the fiduciary duties of the SBA’s fund managers and investment advisors by clearly defining the factors they can, and can not, consider in their investment decisions. It states that ESG considerations will not be included in the state of Florida’s pension investment management practices.
The resolution stipulates that the SBA “may not sacrifice investment return or take on additional investment risk to promote any non-pecuniary factors”. It also instructs the SBA to “conduct a comprehensive review and prepare a report of the governance policies over the voting practices of the Florida Retirement System Defined Benefit Pension Plan.” The text of the resolution can be found here.
The text of the resolution can be found here.
“Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity,” said Governor Ron DeSantis. “With the resolution ... the tax dollars and proxy votes of the people of Florida will no longer be commandeered by Wall Street financial firms and used to implement policies through the board room that Floridians reject at the ballot box."
This follows action taken in December by Governor DeSantis, CFO Jimmy Patronis, and Attorney General Ashley Moody to reclaim the SBA’s proxy voting authority from large financial firms such as Blackrock, State Street, and Vanguard and provides guidance to the SBA employees now responsible for proxy voting and investment decisions. This guidance will ensure that the decisions made by these civil servants on behalf of the people of Florida are in accordance with the voters’ values as expressed through the democratic process rather than blindly in lockstep with the ESG mania taking hold of Wall Street and Washington.
Last month, Governor DeSantis also unveiled proposed legislation for the 2023 Legislative Session that would amend Florida’s Deceptive and Unfair Trade Practices statute to prohibit discriminatory practices by large financial institutions based on ESG social credit score metrics.
For more information, click here. To watch a video of the announcement, click here.