Jimmy Patronis’ Office rebukes D.C. Democrats’ concerns over Florida’s ESG stance

by | May 21, 2024

Florida’s Chief Financial Officer Jimmy Patronis’ office dismissed criticisms from Washington Democrats about the state’s anti-ESG investment stance, defending the policies as beneficial for the state’s financial health and rebuffing claims of increased costs and political interference in investment decisions.

Florida’s Chief Financial Officer Jimmy Patronis’ office rebuffed criticisms from Washington Democrats on Tuesday regarding the state’s stance on environmental, social, and governance (ESG) investing.

Frank Collins, Patronis’ Chief of Staff, defended Florida’s policies in response to a letter from Representatives Jerrold Nadler and J. Luis Correa that questioned the financial impact of these policies on state taxpayers.

Nadler and Correa’s letter to Attorney General Ashley Moody and Patronis raised concerns about the negative financial consequences of Florida’s anti-ESG stance. They cited studies suggesting that similar laws in other states had increased borrowing costs, reduced economic activity, and added expenses for public pension funds.

The representatives further argued that prohibiting ESG factors in investment decisions injects politics into financial management and jeopardizes public investments.

State efforts to penalize responsible investment by limiting investors’ use of ESG factors have injected politics into previously objective financial decisions,” the pair wrote. “A growing body of evidence demonstrates that these policies threaten public employees’ retirement savings and leave taxpayers on the hook for higher fees and increased borrowing costs.”

Moreover, the letter states that the Republican majority of the House Judiciary Committee is investigating the use of ESG factors by financial institutions and the impact of state-level restrictions on these practices.

To support this oversight, they requested information from Patronis anf Moody regarding the direct and indirect financial effects of laws that restrict responsible investment. Specifically, they are interested in the estimated costs to pension funds and any consultations with groups promoting these laws. Additionally, they seek data on companies barred from state business due to these restrictions, with responses requested by June 3.

“In short, when states substitute politics for the reasoned judgment of investment professionals, taxpayers foot the bill—along with the teachers, firefighters, and others who served their states and depend on well-managed public pension funds to safeguard their retirement savings,” the letter continues.

Collins subsequently dismissed these concerns, characterizing the criticisms as politically motivated attacks from officials in states like New York and California. He noted that residents from these states are moving to Florida in large numbers and bringing their pensions with them. Collins suggested that instead of criticizing Florida, these officials should seek help.

“Jerry Nadler and Luis Correa have just joined Sheldon Whitehouse in the club of Leftwing Washington officials, from Blue States, obsessing over Florida. The people they represent in New York and California are moving to the Sunshine State in droves, they’re bringing their pensions with them – and firing off an angry letter isn’t going to change that,” Collins said in a statement to The Capitolist. “Rather than attacking Florida, they should be asking for help.

Collins also asserted that ESG investing has been unsuccessful, pointing to the closure of ESG funds and a slowdown in ESG-related hiring. He cited the investment firm BlackRock, claiming that its CFO observed deteriorating returns from ESG investments and subsequently divested, resulting in a record $2.1 billion in interest for the Florida Treasury.

“ESG is a loser. That’s why ESG funds are closing down and ESG hiring has slowed,” he said. “When BlackRock was obsessing over ESG, the CFO looked at their returns, saw their performance deteriorating, and divested. Since then, the Treasury has experienced a record $2.1 billion in interest.”

He additionally emphasized that the CFO’s primary concern is the return on investment for public pension funds, which serve public servants such as firefighters and police officers. Collins argued that using these funds for political purposes is inappropriate.

“Ultimately, the CFO only cares about returns on investment,” said Collins. “Those pension funds are for public servants, including firefighters and police officers, and the CFO believes using their pension money for political ends, when these heroes worked so hard for them, is abhorrent.”


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