Governor Ron DeSantis (R-FL) has now signed House Bill 3 – the Government and Corporate Activism bill – into law. The bill surrounds Gov. DeSantis and his administration’s efforts to combat the usage of Environmental, Social, and Governance (ESG) standards at the state level.
ESG standards (and the adherence to them) is an economic philosophy that puts emphasis on companies maintaining environmental sustainability (such as low CO2 emissions) and social responsibility (diversity in the workforce at all levels).
Gov. DeSantis spoke at an event after the signing of the bill, stating, “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 personal fund, and 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.”
DeSantis would also speak on the push to move to an ESG based economy as a move from the “Davos elite” that is looking to bypass the political process in order to control society at large.
“This vision is not a vision that usually can win elections. And so they want to go around that process and they want to use economic power to impose this agenda on our society…If you go to a place like Davos, they’ll all meet and they’ll say ‘we got to do all this,’ and then they try to impose that agenda. And so it’s really an elite driven phenomenon,” stated DeSantis.
“But at the end of the day, they’re trying to exercise power over our society. They’re trying to change society. They’re trying to change policy when it comes to things we don’t like.”
Moreover, there is a fear that ESG standards could lead to a system similar to the “social credit” system that is seen in places such as China, which is a rating system of an individual, corporation, or government entity’s “trustworthiness.”
“The danger, I think, is that there’s a movement to take the ESG score and put it as part of your credit determination. So, you could be perfectly credit worthy. And then they’re saying you’re not doing the right ideology. So, then you get dinged when it comes to that? That’s unacceptable,” mentioned DeSantis.
Finally, Florida’s Chief Financial Officer (CFO) Jimmy Patronis agrees with the decision of the DeSantis administration to refrain from adhering to the ESG standards.
He told The Floridian that “ESG is fine if you want to invest in it, do that with your money. But you’re not going to use the state of Florida’s money to go out and push an ESG agenda.”
CFO Patronis also spoke on BlackRock and its relationship with the state of Florida. BlackRock is an investment management and financial services company that has been one of the main contributors to the ESG movement. Patronis believes that Florida’s money could be better used elsewhere.
“We had a lot of money in it, we had about $2 billion in BlackRock. BlackRock was not performing as well as some of the other contemporaries that were fund managers. So, we pulled the money out of it. BlackRock has led, really, an ESG investment movement. And I’m just like, the money is going to where I can get a better return on investment,” stated Patronis.
When asked about recent developments between Patronis and the DeSantis administration’s approach to ESG, the Florida CFO said that “we’re doing a number of things that are to ensure that Florida is not allowing our dollars to be used to be used in a way to push some type of a political agenda.”
To listen to the Governor's speech concerning the bill, click here.