Florida Gov. Ron DeSantis (R) has done for Floridians what Pres. Joe Biden’s (D) veto prevented Congress from doing for all Americans: save citizens being victimized by woke Wall Street banks and giant investment managers who put politics over profits.
On Tuesday, DeSantis signed legislation “to combat government- and corporate-sanctioned activism and the environmental, social, and corporate governance (ESG) movement,” the governor’s office announced in a statement:
“Governor Ron DeSantis signed comprehensive legislation to protect Floridians from the corporatist environmental, social, and corporate governance (ESG) movement — 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.”
The new law prohibits institutions from using their powerful financial leverage to impose ESG ideology, regardless of the will and best interest of Floridians. Specifically, the legislation:
- Stops financial institutions from discriminating against customers for their religious, political, or social beliefs – like owning a firearm, securing the border, or increasing our energy independence.
- Bans the financial sector from considering so-called “Social Credit Scores” in banking and lending practices aimed to prevent Floridians from obtaining financial services like loans, lines of credit, and bank accounts.
- Blocks the use of ESG in all investment decisions at the state and local level, ensuring that only financial factors are considered to maximize the return on investment, protecting retirees and taxpayers alike.
- Prohibits state and local governments from using ESG as part of the procurement and contracting process.
- Eliminates consideration of ESG factors by state and local governments when issuing bonds.
The measure obligates the Attorney General and Commissioner of Financial Regulation to enforce the law’s provisions to the fullest extent of the law.
The new law isn’t DeSantis’ first success protecting citizens from ESG. In 2022, the Florida governor barred fund managers for state pension funds from considering ESG factors in the investment process and pulled $2 billion from ESG-enforcer BlackRock.
Americans nationwide don’t enjoy the same protections, however, due to Pres. Biden’s veto of a bipartisan joint resolution.
In March, Biden vetoed a bipartisan Congressional joint resolution nullifying his administration’s rule freeing asset managers to invest their clients’ retirement savings in political causes, rather than in the most profitable investments.
Under federal ERISA (Employee Retirement Income Security Act) law, asset managers have a fiduciary responsibility to their clients to base investment decisions on their expected financial profitability alone. Recent studies have documented that ESG investments underperform investments in politically-neutral companies.
But, a Labor Department rule that went into effect in January gave fund managers the freedom to pick investments based on ESG goals, as well - even if that meant sacrificing retirement account growth.
In February, the House and Senate passed a joint resolution (H.J. Res. 30), introduced by Rep. Andy Barr (R-Ky.) and supported on the Senate side by Sen. Mike Braun (R-Ind.), voiding Biden’s rule and, thus, requiring asset managers to return to investing for profitability only.
Biden vetoed the joint resolution, which would have had the same force as a law, as he had previously threatened in a policy statement defending his rule allowing retirement account and investment managers to sacrifice profit in favor of ESG goals.
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As the White House statement acknowledged, the Labor Department rule allows investment in climate and other social goals:
“This rule clarifies that retirement plan fiduciaries may consider climate change and other environmental, social, and governance factors in selecting retirement investments and exercising shareholder rights, when those factors are relevant to the risk and return analysis.”
“The 2022 Biden-Harris Administration rule makes clear that ERISA fiduciaries can consider factors such as corporate accountability and transparency, climate, and liability risks if they find them relevant to the analysis of an investment’s risk and return, in the same way that they would prudently consider other relevant factors.”
The business and economic reporting of CNSNews.com is funded in part with a gift made in memory of Dr. Keith C. Wold.
ESG represents an attempt to impose an ideological agenda through large financial institutions, rather than through the constitutional process.— Ron DeSantis (@GovRonDeSantis) May 2, 2023
This end-run around constitutional accountability is bad for the economy and for self-government. pic.twitter.com/qDOTj6JnoV