DeSantis Signs Anti-ESG Rules into Law
Florida Governor Ron DeSantis signed into law a series of sweeping anti-ESG measures on Tuesday, including rules prohibiting the consideration of any ESG factors in state and local investment decisions or procurement processes.
The passage of the new laws marks a significant step for the Republican-led anti-ESG movement, which also included a recent attempt at the federal level to reverse a DOL rule allowing for the consideration of ESG factors in investment decisions in ERISA plans, which was vetoed by President Biden.
In a statement following the signing of the legislation, the Governor’s office said that the laws will “protect Floridians” from the ESG movement, which it described as “a worldwide effort to inject woke political ideology across the financial sector, placing politics above the fiduciary duty to make the best financial decisions for beneficiaries.”
Initially proposed in February, the new law blocks the use of ESG in all decisions at the state and local level, prohibit state and local governments from considering ESG factors in the procurement and contracting process, and also prohibits the use of ESG factors in bond issuances by state and local governments – including a “contract prohibition on rating agencies whose ESG ratings negatively impact the issuer’s bond ratings.”
Additional rules under the new law include prohibitions on the use of “Social Credit Scores” in banking and lending practices, and on banks engaged in “corporate activism” from holding government funds as a Qualified Public Depository.
DeSantis has been among the most vocal anti-ESG advocates, barring fund managers for state pension funds last year from incorporating ESG factors in the investment process, and recently pulling $2 billion from BlackRock over its use of ESG factors.
In response to the Biden veto that upheld the DOL’s ESG rules, DeSantis formed an alliance of state governors, in order to coordinate their anti-ESG actions and initiatives. In the statement, the Governor’s office said that the new laws will serve as a “blueprint for the nearly 20 states” that have joined the alliance.
“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.”