Florida inches closer to ban on ESG policies with taxpayer funds

Financial institutions will no longer be able to discriminate against borrowers in Florida based on their religious or political beliefs if a bill passed by the House is signed into law by the governor.

House Bill 3 passed by an 80-31 vote last week and would remove environmental, social and governance considerations in state and local pension funds, bonding decisions, lending decisions and state contracting.

In a Friday news release about the bill’s passage, House Speaker Paul Renner, R-Palm Coast, said that such practices damage the trust of Floridians when it comes to investing.

"Floridians should be able to trust that the investment of their tax dollars and state employee retirement assets are guided by nonpartisan, impartial financial factors and not subject to corporate activism," said Renner.

Renner also noted that "martini millionaires" should not be using taxpayer money to push their political agendas and activism.

"This bill also protects Floridians, businesses, and organizations from discrimination based on political or religious beliefs or whether their business happens to be popular with jet set elitists. These martini millionaires should not be able to use Floridians’ hard-earned savings to serve activist, political agendas or to decide who can open an account based on their political prejudice." Renner said.

Commerce Committee Chair and bill sponsor Bob Rommel, R-Naples, also stated in the news release that some of the world’s largest financial institutions are working against sovereign governments that they do not agree with politically. He also said they are implementing lending policies based on political bias including social credit scores.

The bill seeks to prohibit such actions.

"We have an obligation to protect our businesses and citizens against financial institutions that use an arbitrary social scoring system to determine whether they have access to capital." Rommel said.

In the bill’s text, it states that a chief financial officer or other authorized party must make their decisions based solely on pecuniary factors and may not undermine the interests of the people of Florida.

According to the bill’s text, the term "pecuniary factor" is defined as prudently determining that an investment outcome is "expected to have a material effect on the risk or returns of an investment based on appropriate investment horizons consistent with applicable investment objectives and funding policy."

The legislation also has support from other states, as Gov. Ron DeSantis announced on March 16, that he is leading an alliance of eighteen other governors from Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia, and Wyoming to push back against the ESG agenda.

"At my direction, Florida has led the way in combating 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 in his March 16 news release.

DeSantis also noted in his announcement that Florida will not allow "woke" executives to put their political agendas ahead of the finances of their clients.