Ron DeSantis signs ESG bill banning public funds being invested in social and environmental projects

Gov. Ron DeSantis signed into law a bill Tuesday that prohibits state officials from investing public money in funds that promote environmental, social and governance causes.

Proponents of ESG investing say they represent capitalism with a conscience, and that moving money away from fossil fuels, for example, is a good bet on future returns in a greening economy.

But DeSantis says they were an attempt to impose the politics of the “Davos elites” through financial markets.

“They want to use economic power to impose this agenda on our society,” he said.

“And we think in Florida, that’s not going to fly here.”

The bill is one of the most far-reaching attempts to date by Republicans to crush sustainable investment efforts.

And it marks a clear message from DeSantis, as he lays out his culture war credentials ahead of an anticipated presidential run.

The bill prohibits state and local governments from using ESG factors in investment decisions.

House Bill 3 also required state-registered banks to make loans to companies in such industries as fossil fuels, firearms, and private prisons.

Conservatives argue that banks discriminate against companies in controversial areas.

The law also prohibits the sale of ESG bonds, an increasingly popular way to finance green energy projects or to lower financing costs for companies meeting emissions or diversity targets.

“Florida will not bow to the political virtue of martini millionaires,” said House Speaker Paul Renner.

“Companies have no right to circumvent our democratic process.

“Companies that engage in ESG harm their customers and the communities they serve, including Florida retirees, by making everything they produce more expensive.”

Critics of the move say it will cut Florida off from ESG mandate funding, and it will be difficult to enforce.

A fact sheet published by the Florida Governor’s office outlining the new law

President Joe Biden vetoed his administration’s first veto, rejecting a bill that would overturn a Labor Department rule about fund managers considering “environmental, social and good governance”

But the subject is something that the Republicans have united around. In March, 19 governors, including DeSantis, focused on President Joe Biden and his embrace of the principles of ESG

“We as freedom-loving states can work together and use our state pension funds to force change in how big asset managers invest the money of hard-working Americans, to ensure companies focus on maximizing shareholder value, rather than the proliferation of awake ideology,” they wrote. .

They said they would work together to “continue fighting the administration’s decision to jeopardize the retirement savings of millions of Americans in order to promote far-left priorities.”

The issue triggered the first Biden veto of his presidency. He stopped a Republican-led bill that would have overturned his administration’s rule to allow retirement planners to consider ESG factors.

With climate change, social impacts and pending litigation having significant financial implications, government officials argued that the investment caps were a potential disaster.

Biden said in a video released by the White House that he vetoed the measure because it “endangers the retirement savings of individuals across the country.”