On Tuesday, Governor Ron DeSantis of Florida backed measures to prevent the Florida Retirement System Pension Plan from investing in accordance with the environmental, social, and corporate governance (ESG) movement.
DeSantis' office stated that these actions will ensure that public fiduciaries invest in a way that maximizes the return for Florida taxpayers and retirees without considering the ESG agenda.
“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 also mandates that investment decisions should not be based on non-financial factors and that the State Board of Administration must not sacrifice returns or take on additional investment risk to promote such causes.
DeSantis' announcement comes one month after the Florida Treasury divested $2 billion from asset management company BlackRock, a major proponent of the ESG movement.
Florida CFO Jimmy Patronis explained that the state needs “partners within the financial services industry who are as committed to the bottom line as we are” and that they would be “taking their business elsewhere.”
This divestment is among the largest such efforts from Republican state governments, who have argued that voting priorities of asset managers, such as pressuring portfolio companies to transition away from fossil fuels, constitute the mismanagement of public assets.
In response to the divestment, BlackRock CEO Larry Fink commented at the World Economic Forum that skepticism toward the ESG movement has become “personal” and that opponents are attempting to “demonize the issues.”
"I'm taking this very seriously," he told Bloomberg TV in Davos. "We are trying to address the misconceptions. It's hard because it's not business anymore; they're doing it in a personal way. And for the first time in my professional career, attacks are now personal. They're trying to demonize the issues."
"Let’s be clear: The narrative is ugly; the narrative is creating this huge polarization,” Fink added. "If you really read the CEO letters that I’ve written in the past, I talk about a transition.”