Florida Gov. Ron DeSantis (R) moved to prohibit state-run fund managers from taking environmental, social or governance (ESG) factors into consideration when making investments.
“Corporations across America continue to inject an ideological agenda through our economy rather than through the ballot box. 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,” DeSantis said in a release.
ESG investing considers nonfinancial environmental and social factors, as well as traditional financial metrics, when looking at an investment’s risk and growth potential.
The governor’s office announced Tuesday that DeSantis and trustees of the State Board of Administration (SBA) had approved measures to further block ESG factors and mandate “that all investment decisions focus solely on maximizing the highest rate of return.”
DeSantis is among a number of Republicans who see the investing strategy as liberal policies encroaching on the free market and financial decisions that should be based strictly on the money.
The GOP opponents of ESG have cited particular concern about considering ethics when making calls on the fossil fuel industry, which is both a key money-making sector and a main driver of climate change.
“We need asset managers to be laser focused on returns and nothing more. Florida’s not going to subsidize the actions of a bunch of Leftist ideologues who hate America; we’re not going to let a bunch of rich people in Manhattan or Europe try to circumvent our democracy,” said Florida Chief Financial Officer Jimmy Patronis.
The Tuesday move from the Florida governor’s office updates the state’s Retirement System Pension Plan policy and SBA corporate governance proxy voting guidelines, according to the governor’s office, and follows earlier efforts from DeSantis to curtail reliance on ESG factors in state investments.