DeSantis signs bill to outlaw social credit scores, cracking down on ESG

Published May. 2, 2023, 9:35 a.m. ET | Updated May. 2, 2023

Gov. Ron DeSantis signs anti-ESG legislation in Jacksonville, Fla., May 2, 2023. (Video/Gov. Ron DeSantis' office)
Gov. Ron DeSantis signs anti-ESG legislation in Jacksonville, Fla., May 2, 2023. (Video/Gov. Ron DeSantis' office)

JACKSONVILLE, Fla. (FLV) – Gov. Ron DeSantis signed a bill to prohibit state investments from considering environmental, social, and governance, or ESG, factors in public investments.

Environmental, social, and governance, or ESG, is a commercial paradigm that bases investment decisions on political issues like social justice and renewable energy efforts.

The new law prohibits state and local governments investments from sacrificing investment return to promote ESG investments.

“We want to have an economy that’s based on value. That’s based on the best interests of beneficiaries if you’re talking about a pension fund,” DeSantis said.

“We don’t want to have an economy in which these businesses are taking all these positions on political issues or using shareholder assets to advance an ideological agenda.”

Speaker of the House Paul Renner, R-Palm Coast, said asset managers pushing ESG investments are “imposing a far left extreme agenda.”

“And so they are driving up our cost. They undermine our national security,” Renner said. “They hijack the democracy because no matter how we vote in an election, they’re going to force these companies to go in a leftward direction.”

The law said financial institutions such as banks could face administrative sanctions if they deny or cancel services based on political or religious beliefs.

Certain public bond issuers would be banned from issuing an ESG bond or contracting with rating agencies that use ESG scores that directly impacts the issuer’s bond ratings.

With regards to government contracting, the law bans state and local governments from considering social, political, or ideological believes when evaluating potential vendors. The governor considered this “social credit scores.”

It also prohibits banked that engage in corporate activism from holding public deposits as a Qualified Public Depository.

The attorney general, chief financial officer and commissioner of financial regulation are given the authority to enforce those provisions.

“We don’t want any banking or lending practices to be imposing an ideological litmus test on your ability to get a loan, a line of credit, or even a bank account,” DeSantis said.

Rep. Bob Rommel, R-Naples, carried the legislation after years of researching the ESG movement. Sen. Erin Grall, R-Fort Pierce, carried the bill in the Senate.

Democrats responded to the governor’s signature of the bill.

“This is one step closer to telling every day Floridians how to spend their own money – Floridians that are working hard every day to put food on the table, fill their gas tanks up and make their own choices on how to live a healthy, prosperous and safe life,” Senate Democratic Leader Laurent Book, D-Davie, said in a statement.

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