Florida’s DeSantis Takes Aim at ‘Woke Capital’

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Gov. Ron DeSantis is proposing laws to take on what he calls the ‘corporate elite’ in the environmental, social and governance movement

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The governor, who announced the proposal with Florida House of Representatives Speaker-Designate Paul Renner, said he was targeting the economic power of the “corporate elite.”

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“We are protecting Floridians from woke capital and asserting the authority of our constitutional system over ideological corporate power,” Gov. DeSantis said.

Moves by large corporations and banks to give priority to ESG factors in their decision-making have drawn the ire of conservatives, who argue that investments should be focused on making money, not social change.

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A press release from Mr. DeSantis, a Republican star who is widely expected to seek his party’s nomination for the 2024 presidential election, called the ESG movement a kind of “financial fraud” and ESG investors “corporate cartel elites.”

The proposed legislation would stop banks, credit-card companies and money transmitters from discriminating against customers for their religious, political or social beliefs.

In February, Mr. DeSantis criticized the GoFundMe platform for its decision to refuse to forward donations for Canadian truckers protesting vaccine requirements and its warning it would potentially redirect unclaimed money to charity. GoFundMe ultimately said it would refund all the donations.

Mr. DeSantis also proposed legislation that would bar fund managers with Florida’s State Board of Administration, which invests retirement money and other state assets, from considering ESG factors and require them to only consider maximizing returns. He said he would make a similar proposal at the next SBA meeting. As of May 31, the Florida SBA managed $240 billion in assets, according to a performance report.

The American Legislative Exchange Council, an influential association of state legislators, in April pushed states to adopt similar measures.

One expert cautioned that ESG considerations are now so mainstream among investment managers that Florida’s moves could dramatically narrow the state’s choices of places to park its money—and might even hurt its returns. It is unlikely, for example, that a real-estate-focused fund would ignore climate change as a risk factor and buy up buildings projected to be flooded in the near term, said Josh Lichtenstein, a New York-based partner at the law firm Ropes & Gray LLP.

“The reality is that investment managers are saying ‘ESG is a source of risk, and we’re controlling that source of risk,'” Mr. Lichtenstein said. “It is hard as a fiduciary to say ‘Well, we think we should disregard this type of risk because we’ve been told it’s politically desirable to disregard it.'”

Write to Richard Vanderford at [email protected]

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Credit: www.Businesshala.com /

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