Today, Governor DeSantis (R-FL) signed into law an anti-ESG bill that, among other things, bars managers of the state's pension fund from considering ESG factors when making investments. Instead, pecuniary factors are the only ones that can be considered. Additionally, this legislation--according to a press release from Governor DeSantis' office--would (1) "[b]lock the use of ESG in all investment decisions at the state and local level"; (2) "[e]liminate consideration of ESG factors by state and local governments when issuing bonds"; (3) "[p]rohibit state and local governments from using ESG as part of the procurement process"; (4) "[b]an the financial sector from considering so called 'Social Credit Scores' in banking and lending practices"; and (5) "[s]top[] financial institutions from discriminating against customers for their religious, political, or social beliefs." In effect, this legislation represents the latest--and most far-reaching--iteration of Republican efforts in Florida to combat ESG principles.
Indeed, this legislation embodies an escalation in terms of the increasing divide between red and blue states in how they address ESG principles. Notably, the Florida legislation enshrines into law protections against discrimination by banks for those individuals who "lawful[ly] own[] [] a firearm," are engaged in the "exploration, production, utilization, transportation, sale, or manufacture of fossil fuel-based energy, timber, mining or agriculture" or who "support . . . combatting illegal immigration," thus providing additional protection for certain categories of people who typically express conservative opinions and identify with causes supported by the political right wing. That said, it is unclear the extent to which this legislation will have an impact for practical purposes (or survive legal challenge), or if it rather constitutes a form of "virtue-signaling" by Gov. DeSantis and the Florida Republican Party to their constituents.
Nonetheless, it is clear that this Florida legislation will serve as a model for similar efforts by politically-aligned states, and contribute to the difficulties encountered by American businesses as they seek to navigate between the competing demands of blue states and red states with respect to ESG principles. (https://www.mintz.com/insights-center/viewpoints/2301/2023-02-15-navigating-fiduciary-duties-amidst-rise-anti-esg)
Florida Gov. Ron DeSantis on Tuesday signed into law an extensive bill opposing environmental, social and corporate governance factors when it comes to state and local funds, bonds and more, in his latest move against what he decries as "woke ideology." The measure, known as House Bill 3, codifies rules DeSantis formalized in January barring managers of the state's pension fund from weighing ESG factors when investing. Last summer, he proposed legislation enshrining those changes, saying he planned to push a related bill in the state's current legislative session. DeSantis' rules mandate that the investment decisions of the State Board of Administration's pension managers investing on behalf of the Florida Retirement System must be based solely on pecuniary factors — in other words, those based on money.
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