Florida’s Republican governor Ron DeSantis earlier this month signed comprehensive legislation to protect citizens from what he referred to as a “worldwide effort to inject woke political ideology across the financial sector”, and from the “corporatist ESG movement”.
Entitled Government of Laws Not Woke Politics, the bill aims to codify actions taken by DeSantis and trustees of the State Board Administration of Florida to remove ESG considerations from state investment decisions, and ensure that all investment decisions are based solely on maximising the highest rate of return.
“Through this legislation, Florida will continue to lead the nation against big banks and corporate activists who’ve colluded to inject woke ideology into the global marketplace, regardless of the financial interests of beneficiaries,” DeSantis declared. “Everyday Floridians invest their hard-earned money to maximise profits and generate the most return on investment possible, but fear of retribution by the woke mob has resulted in the rise of ‘ESG’ factors.”
Measures included in the package include eliminating ESG factors for state and local governments-issued bonds, as well as for procurement and contracting processes. The new rules also prevent financial institutions from discriminating against customers on religious, political, or social grounds – including ownership of a firearm.
In addition, they ban the financial sector from considering so-called social credit scores in banking and lending practices, including for the attribution of loans, lines of credit, and bank accounts to citizens.
“Companies that engage in ESG hurt their customers and the communities they serve, including Florida’s retirees, by making everything they produce more expensive,” said Florida House of Representatives speaker Paul Renner upon the legislation’s release. “ESG undermines our national security and bypasses our democratic process. I applaud Governor DeSantis for standing up to corporate titans who believe they are a law unto themselves and protecting Florida’s hardworking families.”
The announcement echoed similar initiatives taken by red states such as Texas and Louisiana, where fair access laws have been enacted to prevent companies from discriminating against the fossil fuel and firearms industries. It is also intended to serve as a blueprint for the 18 other states that formed an alliance under DeSantis’s lead earlier this year to push against Biden’s green agenda.
“The proliferation of ESG throughout America is a direct threat to the American economy, individual economic freedom and our way of life, putting investment decisions in the hands of the woke mob to bypass the ballot box and inject political ideology into investment decisions, corporate governance and the everyday economy,” a joint statement signed by the 19 state governors who joined the alliance read.
DeSantis has been a leading figure in the US anti-woke and anti-ESG landscape since Biden took office. Given the likelihood of his running for office in next year’s presidential race, his voice will only get louder as he sets off on the campaign trail.
“At my direction, Florida has led the way in combatting the pernicious effects of the ESG regime,” he said, commenting on the anti-ESG alliance’s formation. “Florida has emerged as America’s economic engine, with an unemployment rate consistently lower than the nation’s and the highest rate of business formations of any other state. We will not stand by idly as the stability of our country’s economy is threatened by woke executives who put their political agenda ahead of their clients’ finances.”
Such statements are ominous for the sustainable investment community. Republican presidential candidate Donald Trump’s recently confirmed liability for sexually abusing and defaming writer E. Jean Carroll, for which he has been ordered to pay $5 million in damages, may well turn out to be a blessing in disguise for DeSantis – even though Trump continues to lead the polls at this stage.
ESG investors should stand ready for all outcomes from next year’s presidential election. As the saying goes: “Hope for the best, and be prepared for the worst.”
