JACKSONVILLE, Fla. — Florida Gov. Ron DeSantis' push against banks and investors using environmental, social, and governance (ESG) practices in investment decisions has officially been written into state law.
DeSantis held a news conference on Tuesday in Jacksonville to sign House Bill 3, a government and corporate activism bill.
The law, which is set to go into effect on July 1, bars the state from investing public or state-controlled money on things like sustainability and climate change, along with employee diversity and inclusion.
“We don’t want any banking or lending practices to be imposing an ideological litmus test on your ability to get a loan, a line of credit or even a bank account," DeSantis said.
Last year, the state prohibited the use of ESG in investment decisions for the state pension program. According to the governor, this directed all fund managers to invest state funds in a way that prioritizes the highest return on investments for taxpayers and retirees.
This legislation pushes that initiative even further by putting the prohibited use of ESG in investment decisions into state law.
"We want to have an economy that’s based on value," DeSantis said. "We don’t want to have an economy in which these businesses are taking all these positions on political issues or suing shareholder assets to advance an ideological agenda.”
By investing in ESG factors, people are placing their money into companies that score highly on environmental and societal responsibility scales, according to Forbes. For example, a company that may rank at the top of the environmental factor may be a leader in sustainability initiatives.
"We believe...this is an elite-driven phenomenon," DeSantis said. "It is not ultimately a road that is gonna be good for this country, and it's not gonna be good for other industrialized countries.
President Biden, on the other hand, is working to protect ESG practices at a federal level. In March, he issued the first veto of his presidency on a Republican-authored measure that would ban the government from considering environmental impacts or potential lawsuits when making investment decisions for people's retirement plans.
The Associated Press and 10 Tampa Bay's BriShon Mitchell contributed to this report.
