Florida Gov. Ron DeSantis on Tuesday signed a bill that bans state officials from investing public money into ESG funds.
As previously reported, an ESG fund is one that prioritizes environmental, social, and governance (ESG) issues. It’s basically a “woke” fund.
“There are many flavors of ESG funds; they may, for example, funnel investor money into wind and solar companies or those with diverse board members, or steer funds away from firms involved in fossil fuels,” CNBC notes.
ESG is DOA in Florida. pic.twitter.com/GWnh3tWnKW
— Ron DeSantis (@GovRonDeSantis) May 2, 2023
The Government and Corporate Activism Act specifically “requires that various state actors, including the chief financial officer, state agencies, and the state retirement fund properly prioritize financial risk and return, or pecuniary factors, over any political considerations,” according to National Review.
“It also prohibits the sale of ESG bonds. Local governments are impacted to a noteworthy degree as they too are required to stop promoting environmental and social goals through their investment decisions,” the site reported Wednesday.
A press release from the governor’s office notes that the bill also prohibits “financial institutions from discriminating against customers for their religious, political, or social beliefs — including their support for securing the border, owning a firearm, and increasing our energy independence.”
In other words, it prohibits financial institutions from discriminating against conservatives.
“In Florida and across the nation, we’ve heard from law-abiding small business owners and consumers who’ve been denied access to financial services because of where they work or what they believe in,” the governor said in a statement.
“Through this legislation, Florida will continue to lead the nation against big banks and corporate activists who’ve colluded to inject woke ideology into the global marketplace, regardless of the financial interests of beneficiaries,” he added.
The press release mentioned earlier also notes that the legislation the governor just signed is meant to be used as a “blueprint” by other states seeking to push back on ESG.
ESG represents an attempt to impose an ideological agenda through large financial institutions, rather than through the constitutional process.
This end-run around constitutional accountability is bad for the economy and for self-government. pic.twitter.com/qDOTj6JnoV
— Ron DeSantis (@GovRonDeSantis) May 2, 2023
“Florida will not bow down to the political virtue signaling of martini millionaires. Corporations have no right to bypass our democratic process. Companies that engage in E.S.G. hurt their customers and the communities they serve, including Florida’s retirees, by making everything they produce more expensive,” Florida House Speaker Paul Renner, a Republican, added in his own statement.
“We all want our state employees and local employees — including many classrooms teachers and law enforcement officers who are part of the state retirement system — to have a strong retirement they can count on. With this legislation, we are going to make certain that state funds are managed to prioritize the highest return on investment, as our retirees and taxpayers expect,” Florida Senate President Kathleen Passidomo likewise said.
This move by DeSantis comes after President Joe Biden, a rabid Democrat, rejected an attempt by congressional Republicans to impose a similar ban on the federal level.
“I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country,” the president said in a video posted to Twitter at the time.
I just vetoed my first bill.
This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like.
Your plan manager should be able to protect your hard-earned savings — whether Rep. Marjorie Taylor Greene likes it or not. pic.twitter.com/PxuoJBdEee
— President Biden (@POTUS) March 20, 2023
But the truth is the exact opposite — ESG is putting the retirement savings of individuals across the country at risk. Even Harvard Business Review has admitted this.
“ESG funds certainly perform poorly in financial terms. In a recent Journal of Finance paper, University of Chicago researchers analyzed the Morningstar sustainability ratings of more than 20,000 mutual funds representing over $8 trillion of investor savings,” an HBR article published in March of 2022 reads.
“Although the highest rated funds in terms of sustainability certainly attracted more capital than the lowest rated funds, none of the high sustainability funds outperformed any of the lowest rated funds,” it continues.
But ESG funds don’t just perform poorly financially. They also perform poorly environmentally, ironically enough.
“Researchers at Columbia University and London School of Economics compared the ESG record of U.S. companies in 147 ESG fund portfolios and that of U.S. companies in 2,428 non-ESG portfolios,” the HBR piece continues.
“They found that the companies in the ESG portfolios had worse compliance record for both labor and environmental rules. They also found that companies added to ESG portfolios did not subsequently improve compliance with labor or environmental regulations,” it concludes.
Writers and editors can be contacted at [email protected] with feedback, tips, or corrections.
V. Saxena is a staff writer with a decade of experience as a professional writer, and a lifetime of experience as an avid news junkie. He holds a degree in computer technology from Purdue University. Saxena also contributes to BizPac Review.
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