Florida GOP Gov. Ron DeSantis said Monday he is proposing legislation to end financial institutions in the state using "environmental, social, and governance" (ESG) scores to restrict investment decisions dealing with public funds and accounts.
"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," DeSantis tweeted Monday, outlining the legislative proposal.
The proposal would stop financial institutions from "discriminating against customers for their religious, political, or social beliefs," such as owning firearms, increasing border security, or increasing the nation's energy independence.
It also bans financial sector businesses from using "ESG scores" in their banking and lending practices to prevent Floridians from getting loans, lines of credit, or opening bank accounts.
In addition, the proposal would not allow investment decisions based on ESG at the state and municipal levels to ensure the best growth in investments that fund retirees and taxpayers, as well as eliminates ESG considerations when issuing bonds.
Investopedia defines ESG as "a set of standards for a company's behavior used by socially conscious investors to screen potential investments" to make companies act more responsibly when it comes to protecting the environment, conducting themselves better with employees, suppliers and customers, and being more responsible and transparent in the way it governs itself.
"It has devolved into a mechanism to inject political ideology into investment decisions, corporate governance, and really, just the everyday economy," DeSantis said at a press conference announcing the initiative. "That is not ultimately something that is going to work out well for us here in Florida, or in the United States of America."
He said there is not "a groundswell" of support for the practice among average citizens, and the ideology behind ESG means to prevent the U.S. from domestically producing more energy.
"They do not like us producing more oil and gas," he said. "They do not want us to be energy independent. That is a bad policy."
He said, in addition to putting the U.S. in a bad position depending on others for energy, it ends up raising the cost of all goods which need that energy to produce.
"One of the major things facing our country that we have to do is recapture all the supply chains and bring them out of China," he said. "[During COVID] almost every single thing that people needed was produced in China. [ESG] really helps China. It gives them even a bigger competitive advantage than they already have."
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