On Tuesday, Governor Ron DeSantis signed a bill that prohibits “woke” investing plans, which he argues are “elite” attempts to impose a social agenda rather than ensuring the highest possible profits on pensions and other financial products. The measure was meant to prevent “woke” investment practices.
The Governor, Chief Financial Officer Jimmy Patronis, and House Speaker Paul Renner joined the Governor on a trip to the Jacksonville Port Authority cruise port in order to witness the Governor’s signing of House Bill 3, also known as the Government and Corporate Activism Act.
“With that, ESG is officially DOA in the state of Florida,” DeSantis stated.
“Woke” is a slang term for progressives and liberals used by the Republican Party.
The so-called “ESG investing” is the focus of this piece of legislation. ESG investing refers to the practice of making financial decisions based on environmental, social, and governmental considerations.
In other words, it is important to take into consideration how an investment would help to preserve the environment, strengthen social cohesion, and prevent cronyism and corruption inside firms.
However, according to DeSantis and the people in the legislature who support him, the process is just a way for leftists to push for policies that they could never win at the polls.
“ESG is basically just window dressing for doing whatever these people want to do. And if you go to a place like Davos, you know, they’ll all meet and they’ll say you’ve got to do all this and then they try to impose that agenda,” as stated by the Governor.
The Annual World Economic Forum takes place in Davis, Switzerland. This is the location where commercial, political, and cultural leaders converge to promote “stakeholder capitalism.”
Stakeholder capitalism may be described as taking into consideration all parties involved in economic activities, including investors, employees, and society in general.
According to DeSantis, that violates democratic principles.
“So, it’s really an elite-driven phenomenon. The ESG is just a way to kind of dress it up, but at the end of the day they’re trying to exercise power over our society. They’re trying to change society. They’re trying to change policy when it comes to things that they don’t like,” He stated there in Jacksonville.
In a nutshell, the measure makes it illegal for state or local governments to place pension funds or deposit money with financial institutions that engage in customer discrimination on the basis of a person’s “political opinions, speech, or affiliations,” as well as a person’s religious beliefs.
It prohibits the use of any “social credit score” that is based on politics, religion, gun ownership or engagement in the gun business, participation in the fossil fuel sector, timber, mining, or agriculture, or resistance to illegal immigration or the trafficking of drugs or humans. In addition, it prohibits the use of any “social credit score” that is based on participation in agriculture.
An investment professional speculated in an interview with Phoenix in August that the legislation would not be effective in discouraging investors from making investments since these factors can be significant in determining whether or not an investment is a good one.
“With this issue of ESG integration, that horse has left the barn and it’s in the next county and the barn has burned down and a new one has been built. That’s ages ago; it’s kind of settled. This is just about getting the best data to make the best decisions. That’s all it is,” remarked Matt Orsagh, a member of the CFA Institute, an organization that provides training for financial advisors.
The Sunrise Project came to the conclusion in January that prohibiting ESG might result in states that pursue these policies incurring up to $708 million in cumulative additional investment expenses.
These costs could range anywhere from $97 million to $361 million for Florida alone. These figures are extrapolations derived from an examination of the anti-ESG statute in Texas carried out by the Wharton School of Business.
On January 17, the State Board of Administration, which is comprised of the Republican governor, Attorney General Ashley Moody, and Patronis, decided to remove more than $200 billion in state and local government pension investments from managers that consider ESG criteria.
The decision was carried out by Patronis. In addition, Patronis has extracted $2 billion from the massive investment fund known as BlackRock.