Gov.
Ron DeSantis
(R-FL) has prohibited state-run fund managers in Florida from considering
environmental, social, and governance
factors when making investments, a significant advance in the GOP opposition to investment approaches that conservatives have said penalize fossil fuels and contribute to culture wars.
DeSantis, in concert with the State Board of Administration, approved the measures this week, ensuring that all the state’s
investment decisions
are made “solely on maximizing the highest rate of return,” according to a news release.
“Corporations across America continue to inject an ideological agenda through our economy rather than through the ballot box,” said Florida’s governor. “Today’s actions reinforce that ESG considerations will not be tolerated here in Florida, and I look forward to extending these protections during this legislative session.”
GOP TARGET BLACKROCK CEO LARRY FINK SAYS ESG PUSHBACK HAS BECOME ‘PERSONAL’
Additionally, the governor has proposed legislation to codify his actions against ESG and is calling on the legislature to build off his efforts in combating ESG, which is a growing investment trend that has faced ferocious opposition from Republicans.
This is not the first time that Florida has taken aim at ESG. Last year, Florida’s Chief Financial Officer Jimmy Patronis announced that the state would divest some $2 billion from BlackRock, the largest such state divestment from the money manager over its ESG stance.
While proponents of ESG goals see it as a way that finance and business can cause social change (for example, mitigating the deleterious effects of climate change), Republicans see the drive as an attempt to distort the free market and even the culture of the United States through capital and influence.
Several other states have also divested from BlackRock, which has become known as a leader in the ESG space.
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The anti-ESG position has become a politically salient one. Last year,
West Virginia
Treasurer Riley Moore declared five financial institutions ineligible for state banking contracts on the basis that they “boycott” fossil fuel companies.
The restricted financial institutions are BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo — many of the biggest financial firms in the world. After the blacklist took effect, any existing contracts were voided, and all five firms are no longer eligible for state contracts.
