Florida’s Republican Governor Ron DeSantis has announced that he has purged the “woke” environmental, social, and corporate governance movement criteria, also known as ESG, from the state’s retirement system.
On Tuesday, DeSantis approved measures to prevent the Florida Retirement System Pension Plan from investing in accordance with ESG.
According to a statement from the governor’s office, the approval of the resolution will ensure that public fiduciaries “invest state funds in a manner that prioritizes the highest return on investment for Florida’s taxpayers and retirees without considering the ideological agenda” of the ESG movement.
Twitter boss Elon Musk is among the high-profile critics of ESG.
As Slay News reported, Musk stated earlier this week that “the S in ESG stands for Satanic.”
The S in ESG stands for Satanic
— Elon Musk (@elonmusk) January 16, 2023
Critics say the philosophy confuses profit maximization with political and social agendas.
Those agendas include radical ideologies such as reducing carbon emissions or promoting purported racial equity.
“Corporations across America continue to inject an ideological agenda through our economy rather than through the ballot box,” DeSantis said in a press release.
“Today’s actions reinforce that ESG considerations will not be tolerated here in Florida, and I look forward to extending these protections during this legislative session.”
The resolution mandates that investment decisions “must be based only on pecuniary factors” that excludes the “consideration of the furtherance of social, political, or ideological interests.”
It adds that the State Board of Administration “may not sacrifice investment return or take on additional investment risk to promote any non-pecuniary factors.”
DeSantis proposed measures for the new Florida Legislature that would bar financial institutions from “discriminating against consumers for their religious, political, or social beliefs,” as well as prohibit ESG rankings from preventing residents from accessing financial services.
“I and my fellow trustees have an obligation to make responsible investment decisions on behalf of the beneficiaries we represent, not cater to woke corporate executives trying to force political ideology,” Florida Attorney General Ashley Moody said in the press release.
“Through this action today, we will continue to fight back against ESG agendas that put partisan ideology ahead of financial returns for Florida’s retirees.”
The actions from DeSantis come one month after the Florida Treasury divested $2 billion from asset management company BlackRock.
BlackRock, run by CEO Larry Fink, is a leading proponent of the ESG movement.
Florida CFO Jimmy Patronis informed Fink that the state needs “partners within the financial services industry who are as committed to the bottom line as we are” and added that the state would be “taking its business elsewhere.”
The divestment was among the largest such efforts from other state governments led by Republican officials, who have contended that prominent asset managers’ voting priorities, such as pressuring portfolio companies to transition away from fossil fuels, constitute the mismanagement of public assets.
BlackRock has taken “voting action on climate issues” against dozens of portfolio companies, according to an investment stewardship report, leading some officials to note that such activism could raise nationwide energy prices.
Republican state treasurers divested some $12 billion from BlackRock last year.
Fink said at the World Economic Forum that skepticism toward the ESG movement has become “personal” and said opponents of the philosophy are seeking to “demonize the issues.”