DeSantis announces new legislation to ban ESG, 'woke' banking in Florida

NAPLES, Fla. (WFLA) — Florida Gov. Ron DeSantis spoke at Florida SouthWestern State college's Collier Campus in Naples. Signage at the event read "Government of Laws, Not Woke Politics." The governor proposed new legislation to end ESG "woke" banking.

He called it a push against "these elites" attempting to "inject political ideology into investment decisions, corporate governance, and really just the every day economy," saying it would not work out well in Florida or in the United States, and that there wasn't much support among everyday Americans.

ESG is "environmental, social, and governance," policies for economic institutions and investors focused on how the financial "organization is managing risks and opportunities related to environmental, social, and governance criteria" for sustainability purposes, according to The Corporate Finance Institute.

DeSantis said the purpose of ESG was to limit oil and gas, and that companies using ESG "did not want us to be energy independent." He did not cite specific examples of either specific companies or statements made to that effect by any.

"It affects our national security. When you have to go to foreign countries that are hostile to us to try to get energy, that is not a good place to be in," DeSantis said. "What ESG wants to do is put a premium against that type of business. It's also bad for our national security, when you're doing this stuff with ESG, you are increasing the costs that businesses have to comply with in the United States."

DeSantis said it hurt national interests by forcing the U.S. to use foreign supply chains, saying that America had to recapture the supply chain rather than rely on countries like China for production. He referred to circumstances during the COVID-19 pandemic as an example, and that China didn't deal fairly.

Switching to investment policies, DeSantis said "it also violates the fiduciary duty that executives have to the shareholders have to publicly traded companies," pointing to how funds used to produce returns on pensions and retirement funds were affected.

"What ESG says is 'no we're not going to do, even if it would do a better return, we're not going to allow you to invest in certain areas,'" DeSantis said, naming oil, gas and what he called disfavored areas. "You are constricting the ability of people to invest your money and that means you're not going to do as well as you could have. Some people say that you do better with this, but that doesn't make any sense."

The governor continued, saying that even without ESG, you can invest in "green stuff," and that ESG investments restrict those options. He went further, saying that by using shareholder assets in ESG policies and investments, they were using their customers' funds to put forth a political agenda.

DeSantis said ESG-abiding companies target "disfavored" people who are Second Amendment advocates, and those involved in the corrections industry, particularly involving immigration.

Naming the GEO Group, a private security firm, DeSantis said the company had been "cut off" from banks due to a push to "pursue a de facto policy of abolishing ICE," the U.S. Department of Homeland Security's Immigration, Customs, and Enforcement division.

"I think having a politicized economy is not the way to go, but it raises the idea of who governs our society," DeSantis said. "The Constitution says 'We The People' govern, through elections and different houses of the legislature and the executive, and you can arrive at policy and they can choose other people in future elections."

DeSantis said ESG instead "does an end run around" elections for deciding governing policies. He said companies who say having an enforced border policy was wrong and "could never win favor" during an election. To that point, DeSantis called ESG a "distortion of a government of by and for the people," which lacked accountability to Americans.

"Florida as usual, is leading the charge against this," DeSantis said, pointing to previous ESG-prohibitions for state pensions. "Today, we're going to build off that success with a number of proposals to get through the legislative session" in March.

DeSantis said the policies would include:

* Put executive policies for the State Board of Administration into statute

* Enact protections for Floridians against discrimination by big banks or financial institutions for political, religious, or social beliefs

* Prohibit institutions from using "social credit scores" when making banking and lending decisions

* Florida will no longer house, at state or local government levels, deposits where funds are used for "woke, ESG" policies

* "Make sure ESG is not infecting other decisions in state or local government" involving contractors, bond issuance, or procurement

Senate President Kathleen Passidomo (R-Naples) and House Speaker Paul Renner (R-Palm Coast) were both in attendance and echoed similar sentiments to the governor. Some Florida residents spoke next, discussing their experience with banking limitations due to their political beliefs or other personal preferences.

When DeSantis returned to the podium, he said the proposed legislation was focused on "preserving freedom" in the state of Florida, before opening the floor for questions.

The first question focused on ongoing tensions with the College Board, with DeSantis noting "intersectionality, Black Queer Theory," and "Neo-Marxism" as causes for state concern in the "Black Studies Course."

"In Florida we do education not indoctrination, so that runs afoul of our standards and many people agree with that in other states," DeSantis said. "We were just the only ones that had the backbone to stand up and do it because they call you names and they demagogue you when you do it, but I'm so sick of people not doing what's right because they're worried about people calling them names. We're doing what's right here."

Going further, DeSantis said the College Board was unelected and that nobody's required to use its education content, saying other vendor options existed.

"I've already talked with Paul [Renner] and I think the Legislature is going to look to reevaluate how Florida's doing that. Of course our universities can or can't accept College Board courses for credit, maybe they'll do others," DeSantis said. "And also, whether our universities do the SAT or the ACT, I think they do both, but we're going to evaluate both as far as that process goes, but at the end of the day we highlighted things that were very problematic."

The governor said concerns came from across the political spectrum, and asked why "don't we just do and teach the things that matter?"

"Why is that someone always has to try to jam their agenda down our throats?" DeSantis continued.

The next question the governor was focused on ESG. He said the state policy proposal said the law would not prevent "the best investments," if it included environmental items like solar panels, but instead blocked ESG policies that stopped investment in other lucrative options based on those policies. He said ESG policies ended up more expensive and costing investors more.

Shifting slightly, DeSantis said the U.S. needed to be more competitive with China and that the country should reevaluate its "dependent" relationship on China, referring again to the recent supply chain crisis.