Republican Florida Gov. Ron DeSantis announced proposed legislation Monday designed to end “ESG woke banking” in the state, slamming ESG as an “elite-driven phenomenon” that seeks to impose policies that would otherwise “never win favor” with the public.
ESG, or environmental, social, and governance standards, are a “mechanism to inject political ideology into investment decisions, corporate governance, and really just the everyday economy,” DeSantis said during the press conference. His plan aims to eliminate its influence in the state by withdrawing government support from banks that use it and creating protections for citizens.
DeSantis highlighted ways he believes the standards negatively impact the United States and its citizens, from increasing the country’s dependence on China to violating the company’s duties to their shareholders and undermining the democratic process.
“This is a distortion of a government by and for the people,” DeSantis said. “They are not accountable to you.”
Part of DeSantis’ proposal would put into statute a resolution he issued last August banning state pensions from considering ESG.
The resolution directed Florida’s fund managers “to invest state funds in a manner that prioritizes the highest return on investment for Florida’s taxpayers and retirees” without regard to ESG.
The proposal would also create protections for Florida citizens against discrimination by big financial institutions for their “religious, political, or social beliefs.”
DeSantis argued the standards often target “disfavored” groups, such as Second Amendment advocates and companies like The GEO Group, a Florida-based private corrections company that holds a contract with U.S. Immigration and Customs Enforcement (ICE).
Brandon Wexler, the owner of Wex Gunworks, spoke during the press conference on his experience having his accounts shut down by Wells Fargo after banking with the company for 25 years.
Wexler said he received a letter stating the company does not lend to “certain types of industries.”
DeSantis’ proposed legislation will also prohibit financial institutions from using “Social Credit Scores” in banking and lending decisions, ban the housing of state or local funds in institutions that promote ESG, and ensure ESG is not used in investment decisions or issuing bonds at the state and local level. Additionally, it will direct the Attorney General and Commissioner of Financial Regulation “to enforce these provisions to the fullest extent of the law.”
“Florida, as usual, is leading the charge against this,” DeSantis said.
Florida Senate President Kathleen Passidomo and House Speaker Paul Renner also joined the press conference.
“The goal of corporate activism seen in environmental, social, and governance investing (ESG) is to bypass democracy and transform capitalism to serve an ideological agenda,” said Renner in a statement. “We will not allow these martini millionaires to push unsafe and unsound investment practices that silence debate in the political process, weaken investment strategies for Florida retirees, and discriminate against any individual’s beliefs. I am proud to stand with Governor DeSantis and Senate President Passidomo to put taxpayers, investors, and Florida retirees first.”