DeSantis has criticized financial institutions and corporate executives for considering factors like systemic racism and economic inequality when making business decisions, a practice known as environmental, social and governance, or ESG, investing. In an episode of Glenn Beck’s online show posted Saturday on YouTube, DeSantis told the conservative commentator that he expected the new rules to “make a big splash” when they pass.
“We’re a big pension system,” DeSantis said, “and some of these businesses are going to have to choose between going down the ESG rabbit hole or being able to be invested with the state of Florida.”
The rules are expected to be voted on next Tuesday when DeSantis, Attorney General Ashley Moody and Chief Financial Officer Jimmy Patronis meet as the State Board of Administration. Moody and Patronis are also Republicans and are closely aligned with DeSantis.
The financial industry is the latest to attract the attention of DeSantis, a potential presidential candidate in 2024, for supporting what he considers “woke ideology.” He previously targeted Disney for opposing a bill that banned the teaching of sexual orientation and gender identity to young kids. He championed a new law that limits how businesses train their employees on topics like race and privilege. He also signed legislation that requires state universities to administer campuswide ideological surveys intended to snuff out bias against conservative viewpoints.
DeSantis has been hinting at plans to challenge Wall Street since at least May. DeSantis addressed the Florida Bankers Association in Tampa that month, where he took shots at New York banks that he accused of using their financial power to advance policy, two attendees told CNN. DeSantis ripped financial institutions that wouldn’t do business with gun manufacturers and specifically called out JPMorgan Chase, which had a table of representatives at the event.
DeSantis suggested to the bankers that Florida could wield its massive pension fund like a cudgel against these financial institutions. The state oversees about $200 billion in retirement funds and another $40 billion in other funds, according to the State Board of Administration’s most recent monthly report.
“Stakeholder capitalism is not about politics,” Fink wrote. “It is not a social or ideological agenda. It is not ‘woke.’ It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.”
DeSantis has accused the ESG movement of standing in the way of American energy independence, but Florida’s draft rules do not include the punitive measures pursued by other states. Instead, the proposed policy explicitly states “social, political, or ideological interests” are factors that state investment managers cannot consider.
In a statement to CNN, DeSantis spokesman Bryan Griffin said, “Prohibiting pension investments according to political and ideological objectives will include ESG-style favoritism towards entities who use the environment as a cover for their politicking.”
“Simultaneously, the governor will continue to champion the environment through state initiatives like Everglades restoration, water quality improvement programs, and red tide research,” he added.
Under the new policy, pension fund managers would also have to exercise their voting power as shareholders “solely in the interests of participants and beneficiaries” of the Florida Retirement System. Earlier this year, DeSantis was critical of Twitter’s board for attempting to beat back a bid by Tesla CEO Elon Musk to buy the social media website. DeSantis argued the board was not acting in the best interest of shareholders and DeSantis said the state pension board pressured Twitter’s board to consider the offer.
“If this is politics, we’re going to hold you accountable,” DeSantis said at an April news conference.
DeSantis has accused financial institutions of putting politics over profits. At a July press conference, DeSantis singled out major banks that are refusing to do business with GEO Group, a private prison company based in Boca Raton that has operated detention facilities for US Immigration and Customs Enforcement.
(The CEO of GEO Group, George Zoley, donated $103,000 to DeSantis’ first campaign for governor and the company has contributed $150,000 to the Republican Party of Florida in the past year.)
“Those activists cannot implement those policies through the ballot box,” DeSantis said. “People don’t want to abolish prisons, people don’t want to abolish ICE, people don’t want to defund law enforcement. And so they try to do it through the backdoor by basically kneecapping some of these companies.”
At his July press conference, DeSantis proposed partnering with other conservative states to drive out socially and environmentally conscious investment strategies using their combined shareholder power.
“What we need to do is get other like-minded states to have all of our retirement systems voting rights used as a block basically,” DeSantis said.
DeSantis also said he expects to put forward legislation that will go after credit card companies, banks and money transfer services that block access to their services for political or religious reasons.
PayPal had previously cut ties with a crowdfunding site that was used by the Proud Boys and other rioters at the January 6, 2021, attack on the US Capitol.
State Rep. Anna Eskamani, an Orlando Democrat, wrote on Twitter that DeSantis was “Forcing companies to work with Nazis.”
The presumptive incoming House Speaker Paul Renner affirmed this would be a priority for his chamber when lawmakers return to Tallahassee next year.
“This is a pocketbook issue,” Renner said at DeSantis’ July press event, “and we will not relent until we start dismantling this dangerous form of ESG.”