DeSantis, lawmakers take on “woke” ESG standards in banking

by | Feb 13, 2023

  • Florida Governor Ron DeSantis has announced proposals to dismantle environmental, social, and corporate governance (ESG) standards.
  • The proposal seeks to prevent banking institutions from using “social credit scores” in making lending decisions and to prevent ESG from influencing local investment at the state and local governmental levels.
  • The legislation will also include a provision to prevent discrimination from big banks based on a person’s religious, social, or political beliefs.

Gov. Ron DeSantis announced legislative proposals on Monday that aim to dismantle environmental, social, and corporate governance, otherwise known as ESG standards. The proposal builds upon last year’s measures ordering state fund managers to invest state dollars in a manner that prioritizes the highest return on investment without considering ideological agenda or ESG practices.

According to the governor, the proposal will prohibit banking institutions from using what he referred to as social credit scores in making financial lending decisions. The future legislation also seeks to make sure ESG does not influence local investment at the state and local governmental levels.

“What I think it’s devolved into is a mechanism to inject political ideology into investment decisions, corporate governance, and really just the everyday economy,” said DeSantis. “That is not ultimately something that will work out well for us here in Florida or in the United States of America.”

ESG investing is the practice of investing in firms or funds that seek market-rate financial returns while also targeting beneficial social or environmental impact. The ratings can involve a wide range of issues in investments, such as companies’ climate change vulnerabilities, carbon emissions, racial inequality, and supply-chain labor standards, among others

Among the non-financial performance indicators, the environmental, social, and governance elements are a subgroup that includes ethical, sustainable, and corporate governance challenges including making sure that procedures are in place to guarantee accountability.

Late last year, state officials divested $2 billion worth of assets under management by BlackRock in response to the asset manager’s backing of ESG investing strategies.

Chief Financial Officer Jimmy Patronis announced that his department froze approximately $1.43 billion worth of long-term securities and removed BlackRock as the manager of approximately $600 million worth of short-term overnight investments.

“I believe ESG is un-American because global asset managers are using the woke standards to re-engineer society through billion-dollar industries. It’s undemocratic,” said Patronis. “Moreover, it appears it’s not confined to equities alone. It looks like insurance markets are beginning to write coverage based on ESG criteria. As Florida is doing a lot of great work, I believe that we should be engaging the Office of Insurance Regulation to assess ESG’s role in insurance.”

BlackRock managed $1.43 billion of Florida’s Long Duration Portfolio, which manages investments such as corporate obligations, asset-backed securities, and municipal bonds.

Unlike the externally managed portfolios which are managed by 12 different asset managers, BlackRock exclusively managed the Treasury’s $600 million Short Term Investment Fund (STIF), which is a cash sweep vehicle it uses to assist long-duration, intermediate duration, and short-duration managers in managing their cash on a daily basis.


  1. Tim Burton

    Florida Governor Ron DeSantis and lawmakers are taking a stand against “woke” ESG standards in banking, arguing that such standards are being used to push a political agenda. This move highlights the growing concerns around the politicization of investment decisions. With this in mind, it’s more important than ever to make informed investment decisions. BeatMarket is a user-friendly platform that can help you track the effectiveness of your investment decisions and compare your portfolio’s returns against a benchmark. Check out this article on portfolio diversification to learn more:

  2. Adam

    In fact, machine learning has been used in the banking industry for many years. Over the past few years, as customers increasingly rely on mobile banking and online services, traditional banks have reduced their physical presence, which I think has only benefited from process automation. I advise you to learn more about ML in banking here

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