Naples - Wednesday February 15, 2023: Governor DeSantis has announced his intention to introduce legislation that would bar the State and local Florida governments from use environmental, social and governance (ESG) criteria when seeking funding in the municipal bond market.
ESG investment practices refer to a set of standards that socially conscious investors use to screen investments.
At a news conference in Naples Monday the Governor said the proposed legislation would also ban the private financial sector from considering so called “Social Credit Scores” in banking and lending practices aimed to prevent Floridians from obtaining financial services like loans, lines of credit, and bank accounts.
The Governor said he wants to protect Floridians from "the woke" ESG movement "that continues to proliferate throughout the financial sector. "
“By applying arbitrary ESG financial metrics that serve no one except the companies that created them, elites are circumventing the ballot box to implement a radical ideological agenda," he said. "Through this legislation, we will protect the investments of Floridians and the ability of Floridians to participate in the economy.”
The Governor was joined by Senate President Kathleen Passidomo and House Speaker Paul Renner at the news conference, both republicans affirmed their support for the bill which has not yet been formally introduced. When it is, passage is virtually assured in the GOP dominated legislature.
A news release from the Governor's office says the measure will include:
- Prohibiting big banks, trusts, and other financial institutions from discriminating against customers for their religious, political, or social beliefs — including their support for securing the border, owning a firearm, and increasing our energy independence.
- Prohibiting the financial sector from considering so called “Social Credit Scores” in banking and lending practices that aim to prevent Floridians from obtaining loans, lines of credit, and bank accounts.
- Prohibiting banks that engage in corporate activism from holding government funds as a Qualified Public Depository (QPD).
- Prohibiting the use of ESG in all investment decisions at the state and local level, ensuring that fund managers only consider financial factors that maximize the highest rate of return.
- Prohibiting all state and local entities, including direct support organizations, from considering, giving preference to, or requesting information about ESG as part of the procurement and contracting process.
- Prohibiting the use of ESG factors by state and local governments when issuing bonds, including a contract prohibition on rating agencies whose ESG ratings negatively impact the issuer’s bond ratings.
- Directing the Attorney General and Commissioner of Financial Regulation to enforce these provisions to the fullest extent of the law.
The proposed legislation builds upon a directive issued last year by the Governor and the trustees of the State Board of Administration (SBA) to remove any ESG considerations from state investment decisions.