DeSantis announces multi-state alliance to battle ‘ESG financial fraud’

TALLAHASSEE, Fla. (FLV) – Gov. Ron DeSantis announced that Florida will be joined by other states to root out environmental, social and corporate governance tactics that they argued are “destabilizing the American,” and world, economy.

The governor’s office pointed to a recent Congressional vote that would block environmental, social and corporate governance, or ESG, investing.

It is expected to be vetoed by President Joe Biden, which DeSantis’ office said is in a bid to “further his progressive agenda.”

“At my direction, Florida has led the way in combatting the pernicious effects of the ESG regime by directing our state pension fund managers to reject ESG and instead focus on obtaining the highest return on investment for Florida’s taxpayers and retirees,” DeSantis said.

They said Florida, and other states, would use their influence to remove state pension funds and state controlled investments from firms that “follow the ESG model” of “politics before fiduciary duty.”

DeSantis said in a statement that he previously promised to “spearhead an initiative” to combat ESG nationwide, not just within Florida’s borders.

“Today, we have delivered on that promise,” he said. “Florida has emerged as America’s economic engine, with an unemployment rate consistently lower than the nation’s and the highest rate of business formations of any other state.”

In the joint statement, the involved states said that ESG “threatens the vitality of the American economy and Americans’ economic freedom.”

They said they plan to take actions like cracking down on state and local level investments that involve ESG, and eliminating ESG “factors” when issuing bonds.

The states also said “social credit scores” could be banned.

“This may also include stopping financial institutions from discriminating against customers for their religious, political, or social beliefs, such as owning a firearm, securing the border, or increasing our energy independence,” it said.

“We will not stand idly by as the stability of our country’s economy is threatened by woke executives who put their political agenda ahead of their clients’ finances,” DeSantis said.

Chief Financial Officer Jimmy Patronis, who has worked with DeSantis on battling ESG, praised DeSantis for using the “full force of his administration” in fulfilling his promise.

“It’s his military experience. I’ve said for some time that Florida, the U.S. and the global economy have all been boiled like a frog by the likes of ESG,” he said. “Governor DeSantis and State Treasures throughout the nation have been waging war against an ESG system that creates more losers than winners, and with the Governor’s formation of this anti-ESG alliance – the cavalry has arrived.”

“Like all viruses, ESG has spread into virtually every industry and every corporate boardroom. To fight, and win, we need a major coalition like this one,” he said.

DeSantis ramped up his battle on ESG last year. Earlier in 2023, he proposed the Florida Legislature enact new laws targeting the practice.

DeSantis said ESG has developed into a “mechanism to inject political ideology into investment decisions, corporate governance, and really just the the everyday economy.”

“That is not ultimately something that is going to work out well for us here in Florida,” he said.

DeSantis’ actions on ESG go back to 2021, with him initially directing the State Board of Administration to retake control of state pension fund’s “proxy voting” from fund managers pursuing “ideological outcomes.”

Florida was joined by the following states: Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia, and Wyoming.

Editor’s note: This story has been updated to include comments from Chief Financial Officer Jimmy Patronis.