Ban on socially, environmentally mindful investments advances in Senate

Erin Grall
'We are here before we have to see what that looks like, where our hands are tied as policymakers.'

Florida moved a step closer to banning state and local governments from using environmental, social and governmental (ESG) considerations in making investment decisions.

A Senate panel approved a bill pushed by Gov. Ron DeSantis to require investment managers to consider only the risk and possible returns when investing. The bill (SB 302) would also ban investment managers from issuing ESG bonds or inking contracts with rating agencies that use ESG guidelines in issuing bond ratings.

Sen. Erin Grall, a Vero Beach Republican sponsoring the bill, said that while state and local pension funds might not be showing impacts of ESG-aligned investment decisions, the trend in financial institutions toward using ESG shouldn’t affect Florida’s policies.

“We are here before we have to see what that looks like, where our hands are tied as policymakers in order to keep our bond rating healthy and strong for the state of Florida,” Grall said. “This is something where we can get ahead of a problem and we can focus on the risk or return and what is best for the citizens of the state of Florida when it comes to how their funds are invested.”

The bill passed the Senate Fiscal Policy Committee on party lines, with Republicans in favor and Democrats opposed.

The bill also bans financial institutions from discriminating against consumers on the basis of religious or political beliefs or affiliations, or based on a “social credit score.”

Sen. Lori Berman, a Lantana Democrat, said the bill could restrict the investment options available to fund managers, even if ESG-conscious funds generated greater returns than those that didn’t include those considerations.

“It concerns me that we’re not focusing on how to get the best return,” Berman said. “Investing is a long-term goal, you’re not just investing for tomorrow. … If you don’t think we should be looking at these issues, look at Fort Lauderdale today. The flooding that is going on right now shows the dramatic economic impacts that climate change can have.”

DeSantis and the Cabinet have already moved on the push against ESG-aligned investments. DeSantis banned ESG considerations in state investments through an executive order last year. Chief Financial Officer Jimmy Patronis removed $2 billion of investments in BlackRock, an investment management firm over the issue. In January, DeSantis also called on the Legislature to permanently ban ESG-linked investments.

The bill now heads to the Senate floor. The House version of the bill (HB 3) passed that chamber last month.

Gray Rohrer


  • Rob Desantos

    April 13, 2023 at 4:09 pm

    Have today’s Republicans all forgotten their beloved free market, and the marketplace of ideas? All they are doing is limiting investors’ options with this nonsensical ban. Hypocrites and morons.

    • SteveHC

      April 13, 2023 at 4:12 pm

      – Agreed 100% on both counts (“they” being hypocrites and morons).

  • SteveHC

    April 13, 2023 at 4:09 pm

    Another fine legislative response to non-existent problems. Useless politicians wasting time and taxpayer dollars.

  • Lex

    April 14, 2023 at 9:29 am

    If an ESG fund is also producing at a high level, then it would be okay to buy under the new law because you could legitimately buy for financial reasons. ESG funds don’t naturally perform at or above market by definition. In the occasions that an ESG fund can produce at or better than market level it is because some entity with market power is artificially manipulating the market. If a market it artificially manipulated, then that market it subject to a bubble and eventual collapse. But if some unicorn firm invents a really great battery, it won’t need an ESG market bias to artificially bolster it, it will be valuable per se.

    • Bert Stimson

      April 14, 2023 at 10:05 pm

      The point is there can’t be ESG fund investments at all with this law, so your otherwise valid points become moot by this unnecessary limiting of investment options.

  • Recovering Republican

    April 14, 2023 at 12:02 pm

    Former Republican here.
    And it’s garbage like this, and what DeSantis did last night, that pushed me away.

    All the sane & intellegent people have left the GOP, so the base that’s been left behind are just the kids who ate lead paint chips as kids or Billionaires.

    It’s like they’re passing idiotic laws now just out of spite.

    • Bert Stimson

      April 14, 2023 at 10:07 pm

      Spite is a leading motivator for today’s Republican voters.

Comments are closed.


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