The Florida Cabinet is moving forward with restrictions against “woke investments.”
Gov. Ron DeSantis has made environmental, social and governance criteria (ESG) the latest front in his battle against socially conscious culture, which the Republican Governor says is weakening American society. ESG has become associated with using issues like climate change and racial awareness to influence investments by rating companies’ values.
At the latest meeting of the Florida Cabinet, held on the day of the Primary Election, Cabinet members approved rules for the State Board of Administration (SBA). The rules require the SBA to make investment decisions solely on economic factors and prohibit the agency from sacrificing investment returns or taking additional risks. Another rule requires the SBA to review voting practices of the pension plan.
“The movement that we’ve seen to harness economic power to try to advance an ideological agenda that doesn’t have enough appeal to win at the ballot box is something that is very significant, and I think, ultimately not in the best interest of our society, at writ large, but certainly the people of Florida,” DeSantis said.
“I want to have the values not of Davos imposed on us but of places like Destin and Dunedin, where I grew up,” he continued. “Things like the World Economic Forum, those policies are dead on arrival in the state of Florida. We are not going to go down that road.”
Lamar Taylor, interim Executive Director of the State Board of Administration, introduced the rules during the meeting. He said the measures would protect the pensions of current and future retirees.
“By taking this action today, the trustees will be protecting current and future beneficiaries from investment ideologies that would seek to maximize social impact over and above an actual return,” Taylor said.
Last month, DeSantis announced his proposal for the Legislature to prohibit the SBA pension fund managers from using political criteria when investing state money. The measure would also prohibit Wall Street banks, credit card companies and money transmitters like PayPal from discriminating against customers for their religious, political or social beliefs.
States should pool their power to act as a counterweight to ESG, the Governor added on Tuesday. States like Texas have already passed laws related to green investments.
“I think you’re going to see a really strong groundswell of people wanting to stand up to protect the people in these pension systems for not being roadkill in somebody’s ideological agenda,” DeSantis said.
Chief Financial Officer Jimmy Patronis, Attorney General Ashley Moody and Agriculture Commissioner Nikki Fried make up the Florida Cabinet. Patronis and Moody, both Republicans, signaled their support for the measure.
Fried, who is competing in Tuesday’s Democratic gubernatorial Primary to challenge DeSantis in November, did not indicate support or opposition. However, she has been DeSantis’ consistent critic on the Cabinet.
Florida began its campaign against “woke” corporations ahead of the 2022 Session. This year, the Legislature passed and DeSantis signed what he calls the “Stop WOKE Act” to combat CRT. The law, which is being challenged in courts, prohibits classroom lessons and corporate training from telling people they are inherently racist, sexist or oppressive because of their race, color, sex or national origin.
Patronis called on the Office of Insurance Regulation to also look into ESG standards in the insurance industry. During Tuesday’s meeting, he called ESG a “cult” and “woke standards to re-engineer society through billion-dollar industries.”
“If insurance companies are charging a premium on ESG, we need to know about it,” Patronis said. “We know that asset managers are telling insurers to focus more on climate change or they’ll lose money, they’ll be sued or both.”
“By their own admission, insurance is being used for social engineering, and I am concerned that Florida policyholders may be footing the bill on this wokeism,” he continued. “The same way that families are paying for Joe Biden’s inflation tax, Florida’s policyholders are paying an ESG fee in their policies.”