Up next in Ron DeSantis' war against the 'woke agenda': No ESG criteria in municipal bonds
Florida Governor Ron DeSantis said he will propose legislation that would bar the state and its local governments from using environmental, social, governance criteria when issuing municipal bonds, expanding his push against what he has called a “woke agenda.”
DeSantis released new details on Monday about his plan to require state and local government investments only be guided on potential returns. The Republican governor has previously said the state’s asset managers must stop using ESG investing strategies if they want to keep overseeing Florida’s money, including $220 billion of pension funds.
“We’re also finally going to make sure that ESG is not infecting other decisions at both the state and local government,” DeSantis said during a press conference in Naples on Monday. “So no investment decisions at the state or local government with ESG, no use of ESG in procurement and contracting and no use of ESG when issuing local or state bonds.”
The proposed ban on ESG builds on the Republican’s “anti-woke” agenda, a key piece in his possible 2024 presidential run. Last year, Florida said it’s pulling about $2 billion from BlackRock Inc. in the largest anti-ESG withdrawal announced by a US state and they’ve banned state pensions from investing in strategies that use ESG criteria.
DeSantis has touted Florida as a leader in efforts to push back against this kind of investing, part of a broader national push by the GOP. The leader of the state’s Republican-controlled legislature said he supports these proposals.
ESG investing is a framework that helps investors weigh the merits of investments on the basis of environmental, social and governance criteria, such as susceptibility to climate change, worker disputes, human rights issues in supply chains and corporate governance. Many Republican officials have criticized Wall Street’s ESG policies, and some have taken steps to limit their states’ business with banks that use them. State leaders, including DeSantis, have targeted BlackRock and its Chief Executive Officer Larry Fink, who warned other CEOs in 2020 that “climate risk is investment risk.”
A Bloomberg News review of public records shows that BlackRock didn’t put the bulk of Florida’s money into ESG investments in the first place. The Florida State Board of Administration, which oversees roughly $180 billion in pension money, didn’t hold investments labeled as ESG when DeSantis ramped up his campaign last year, according to data compiled by Bloomberg. Even after the state’s treasury said it would pull $2 billion from BlackRock amid DeSantis’s criticism, the world’s largest asset manager still oversees $12.9 billion for the state’s retirement funds.
“What happens is that the people at the very top, those asset managers like BlackRock, take all of our money and they invest it in one narrow ideological direction,” said Florida Representative Paul Renner, speaker of the state house. “They don’t speak for your voice or mine, they speak for their voice. As the governor said, it’s being hatched by the UN and out of Davos out of their values or ours.”
Under the new legislation, Florida and its localities would also not house deposits in financial institutions that are “pursuing this woke ESG agenda,” DeSantis said.
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