Ron DeSantis Proposes Limits on ESG (Environmental Social Governance)
“By applying arbitrary ESG financial metrics that serve no one except the companies that created them, elites are circumventing the ballot box to implement a radical ideological agenda.”
On Monday, Ron DeSantis outlined a new proposal that would restrict ESG or Environmental Social Governance more. This fits right in with DeSantis’ anti-woke politics.
ESG is an attempt to inject social justice into finance. It’s part of what’s currently driving social revolt in parts of Europe.
CBS 12 in Florida reports:
Gov. Ron DeSantis adds more prohibitions on ESG
Gov. Ron DeSantis spoke on additional proposals that prevent ESG (environmental social governance).
The conference was held at Florida Southwestern State College in Naples, Fla.
He said ESG poses a threat to the American Economy and individual economic freedom, he further said it’s an attempt for corporate’s elite to discriminate against those who do follow a particular “ideological agenda.” His proposal will outlaw this.
“By applying arbitrary ESG financial metrics that serve no one except the companies that created them, elites are circumventing the ballot box to implement a radical ideological agenda. Through this legislation, we will protect the investments of Floridians and the ability of Floridians to participate in the economy,” DeSantis said, at the news conference.
Watch the clips below:
The problem with ESG exemplifies the larger problem with all of the woke ideology that is being forced on the American people by captured institutions: it isn't accountable to the will of the people, and hasn't been enacted by the democratic process.@GovRonDeSantis lays it out… https://t.co/D487xlOWNH pic.twitter.com/28SdbbQjs7
— Bryan Griffin (@BryanDGriffin) February 13, 2023
ESG is a threat to the American economy and the individual freedoms that our country is built upon.
It is dead on arrival in Florida. pic.twitter.com/ZqrdklbUvW
— Ron DeSantis (@GovRonDeSantis) February 13, 2023
More information here:
Our legislative proposal will ensure that financial institutions will no longer be able to discriminate against hard-working Floridians and small businesses on the basis of political, religious or social beliefs. pic.twitter.com/kpaVCmY2zW
— Ron DeSantis (@GovRonDeSantis) February 13, 2023
Caroline Downey writes at National Review:
The ESG movement promotes an investment discipline which emphasizes not just financial returns, but also grades companies on things such as their ethics, board diversity, political donations, and sustainability efforts. Speaking during a press conference in Naples on Monday, DeSantis defined ESG as a “mechanism to inject political ideology into investment decisions, corporate governance, and really just the everyday economy.”
As part of the proposed legislation DeSantis unveiled was a plan to codify into statute a resolution enacted last year that prohibited ESG investing in pension funds for state and local government employees, including firefighters, police officers, and teachers.
The proposed legislation would restrict banks that hold public funds – known as qualified public depositories – from utilizing ESG in in their investment decisions. Investment firms that engage in ESG would also be barred from being lenders to the state or to local governments.
Other Republican governors should follow DeSantis’ example on this.
Featured image via YouTube.
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to the full extent allowed by law.
There should definitely be laws requiring transaction processors and banks to provide services to any lawful business and to any person that without a history of financial crimes.
At the least any federally chartered bank.
I’m guessing by that you mean all FDIC members, which would be all of them that matter.
circumventing the ballot box to implement a radical ideological agenda
Because it is a religion.
More of a communist inspired cult, in the footsteps of the ChiComs.
What a man..
There is no excuse for putting Fascist ESG ahead of the advisor’s fiduciary duty to maximize investors’ return. Plus, the woke investment advisors neglect their duty to disclose their ESG-pushing. The ruling caste has got to go!
If the financial institution or other corporation is HQ’d in another state with branches in FL, what’s to stop them from applying ESG criteria from the boardrooms where decisions are made?
I’m not sure how branches in “the joint and several” states would worki in this case, but, if there is some sort of state charter involved, then that might mean a bank must conduct business under the state laws and regulations.
Nothing would please me more than to see the virtue signaling banks like BofA or Wells Fargo, or others, having to retreat from places with common sense.
Some years ago I applied to BECU (Seattle) to refi our rural IL house. They took my app fee and the refi sailed along until just a few days before the scheduled closing when they denied the loan.
The reason had to do with a BECU requirement for all homes to be FEMA flood plane mapped – which for left coast homes was rarely an issue as the area had already been mapped / rated. But not where our rural IL home was located, at (some?) 650 feet elevation which was 250-300 feet above the Illinois River valley. After a few mind-numbing phone calls / emails with the loan officer, where I pointed out the specific language in the FEMA rules that exempted us they still refused the loan citing the reluctance of ANY underwriter to approve it because of the FEMA rule. BECU made a stricter interpretation / application of the rule than FEMA intended – or so it seemed.
We had to eat the $500 loan fee and reapplied locally where the refi sailed through with no FEMA flood plane mapping hassles. Locals understood that if it flooded where our home was located, the Midwest US would be underwater from Minneapolis to Memphis – or thereabouts.
Apparently there’ s no disputing institutionalized insanity. Or petty financiers in the chain of command. It may eventually be the only solution for corporate woke-ism is to invest local / independent.
Bureaucrats don’t think. It just isn’t what they do. If they did think, they still wouldn’t act on their thoughts.
I’m thinking the state has direct control over any institution with a state charter; those operating from out of state are at least caught by the prohibitions on the state itself doing any business with them, which have already proven to be a big stick in other states.
No banking and investment relationship with any State entity is a big stick. Want to participate in the underwriting syndicate for a bond issue in FL then no ESG. Want to hold State deposits no ESG. That’s easy money for financial firms with built in profits that they are ineligible for if they are insisting on ESG principles.
Hits the bigger National firms who are the proponents of this quackery in the pocket and protects individual consumers and small businesses like the local gun shop from being denied loans or an account based on ideology v strictly financial reasons.
As I understand it DeSantis isn’t going after all ESG related transactions/corporations by Floridians, that wouldn’t fly in court.
What he can do (and has done) is restrict state employee pension funds from investing in them and prevent the state itself from doing business with them. Joe Blogs, average Floridian, can invest where they please.
Wrong. ESG is fundamentally unconstitutional. For guidance, look at how Elon Musk neutered the Twitter board of directors by pointing out that other than Jack Dorsey, they had no stake in the company and acting in defiance of their fiduciary duty to maximize shareholder profits. This is what got Disney’s attention and made it possible for DeSantis to win that case.
DeSantis is just going for quick, easy scores to get into the headlines. This is one of those battles that SHOULD be fought in court but…. crickets. DeSantis should declare ESG to be UNCONSTITUTIONAL and begin enforcing it in court. Period. That is of course, if his Club for Growth financiers are okay with that. Can’t offend the dirty money boys.
And your legal theory of how a governor is authorized to meddle in private contracts is what exactly?
I think DeSantis is dealing with what he has the power to direct, and is focusing on results. That’s good. Trying to do things that he’s powerless to do is not good.
If the State’s pension funds are being administered in an ESG account he most definitely can cut them off by removing the state funds from the account, which he did. Other states should follow suit as well as any investors who find their accounts are being managed by these ESG banks and hedge funds.
As to the Constitutional aspect, I suspect ESG is discriminatory in nature, to say the least, and could be likened to “red lining”, which is against the law, so there is that.
It’s Marxism defined you freak! Totalitarian government is allowed by our constitution? Really? How about YOU explain how that is so. Start with the constitution and work your way forward. Can’t wait to see THAT Rube Goldberg legal contraption/
Ah, just another chance to dig more money out of the poor sap that has no say in the matter.
Sooner or later it all evens out as the pendulum reverses its arc.
John Galt is at the opposite end of the swing.
And hopefully coming in hot.
FWIW, Trump did similarly in 2020, and Biden recently acted to reverse it.
DeSantis is missing the key point. ESG usurps the board members’ fiduciary duty regarding their shareholders by imposing undefined and arbitrary political mandates by demanded by unspecified people speaking for undefined “stakeholders”. Corporate boards have the fiduciary duty of maximizing profits for their shareholders. “Stakeholders” is a political concept that has no legal nor economic meaning.
As an RIA myself, I have a fiduciary duty to make recommendations that are suitable to my clients based on their goals and objectives within specific time frames and taking into consideration their risk tolerance. That is a very easy to define requirement. As a stocks and bonds guy, I spend most of my time researching companies based on very specific financial considerations with cash flow being key. That is very easy to explain to clients and produces results for easily definable reasons.
To now having to add an ESG score so as to appease Marxists is a fundamental threat to the well-being of my clients. I have become very good at walking people through the ESG-approved investments to demonstrate to them how it is a fraud. Just get hold of the list of companies making up the S&P 500 ESG Index fund and show it to them. First of all, there are only 308 companies on it and on a scale of 0-100, most of the companies have a score under 50. Also, breaking up the fund’s performance by that score reveals that performance is inversely related to the ESG rating. In other word, the lower the score, the higher the profit. Go woke, go broke. People are always shocked to find Exxon among the highest-rated and the largest electric car manufacturer Tesla not even included on the list.
It’s a fraud that requires board members and we consultants to decide between Marxism and clients. Just as with doctors who have to ignore the science and follow the politics or lose their licenses to practice.
“Limiting” ESG is a lame solution. It needs to be abolished outright. Marxism is unconstitutional. It destroys companies, markets, communities, families,… everything it contacts. How hard would it have been for DeSantis to propose something that will DESTROY it rather than “limit” ESG?
“Also, breaking up the fund’s performance by that score reveals that performance is inversely related to the ESG rating. In other word, the lower the score, the higher the profit.”
Once upon a time, this was also true of “socially responsible investments” (i.e., no guns, tobacco, military, oil, or other “icky” stocks). Seeing as you’re in the thick of it, do you find this is still true?
Yes, that was in the 1990s when only silly advisors looking to differentiate themselves went that route. One was in my office and was often profiled by the Pasadena Star and even left the firm to start his own office. He was out of business in a year. He had some good clients though and I was friends with him so I got some of his book. Performance took him down.
I’ve learned to weather this wokeness era by being open and up front with everyone:
“I invest to make money. I don’t invest politics, mine nor yours. With absolutely everything being political these days, it would help to be able to discuss the politics but if you can’t handle it, we won’t.”
The old truism that said people with money would rather lose their right arm than their wealth has proven to be true for me. So far, I’ve held on to my more liberal clients by just being up front about it. Most people aren’t very political and giving them a way out is often what they are looking for. Just be honest and even liberals aren’t as woke as you would think. I’m not interested in having accounts but in having clients. I need to trust the clients too. It’s a two-way street.
While I agree that ESG is evil, I don’t see where a state governor would get the power to ban it.
In my opinion you are absolutely correct that applying ESG to private corporate decisions is contrary to a corporation’s fiduciary duty to its shareholders, but the solution would seem to be a private one, a (class action?) suit against the decision-maker for violation of his fiduciary duty. That hits them (or their E&O insurance carrier) in the pocketbook and is more likely to modify actions than is precatory preaching by third parties (sometimes known as “officious intermeddlers”)
No. You incorporate it into the Florida’s constitution. Nothing private about it. Corporate boards are elected by shareholders. No one elected the mutual fund companies to impose their politics on private or public corporations or private investors. It’s a governance issue, not a personal issue. That’s why we have elections in the first place. ESG is a way to get around elections. It is unquestionably unconstitutional. Now what we need to do is find some good lawyers who don’t work for the RNC.
Green, Relative, and Minority (GeRM) theory
This sudden emergence of ESG as a “thing” seems to be another manifestation of “the long march through the institutions” and thus per se evil.
ESG is an offshoot of Obama’s “Operation Chokepoint”, which he used to get banks to refuse to lend money to any Conservative leaning people or groups, i.e. True the Vote, The Tea Party, etc. etc. as well as setting the entire Federal Govt after them, the IRS, OSHA, etc. and harass them for years.