Florida Governor Ron DeSantis has signed a bill into law that prohibits state or publicly controlled funds from considering environmental, social justice, and governance factors when making investment decisions.[0] The bill, dubbed the Government and Corporate Activism Act, is one of the most extensive anti-ESG measures in the US. It also bars the use of ESG factors in bond issuances by state and local governments, while banks that engage in corporate activism are prohibited from holding public deposits as a Qualified Public Depository.[1] The bill also prohibits banks from applying a “social credit score” and denying services to people based on religious beliefs or views on the Second Amendment, illegal immigration, or non-renewable energy sources.[2]
The legislation builds a foundation of transparency for pharmacy benefit manager (PBM) practices and drug prices in Florida, allowing consumers to make the best choices for their own health, according to DeSantis.[3] The bill requires pharmaceutical companies to disclose price increases for price hikes of 15% within a calendar year or 30% within a three-year period.[4] It also reinforces DeSantis’ commitment to transparency in the cost of prescription drugs.
ESG stands for Environmental, Social, and Governance standards used to screen investment, or other financial decisions, in order to encourage ethical and responsible corporate conduct. ESG investing means applying environmental, social, and governmental criteria toward investments. To put it differently, contemplating on how an investment would safeguard the environment, enhance social harmony, and prevent favoritism and misconduct in corporations.[5]
According to a press release from the governor’s office, “PBMs and Big Pharma have managed to escape the public eye and work in the shadows for far too long.[6] I’m proud to sign a bill that takes the reins back from these health care monopolies while empowering consumers.”[6] The law also prevents banks, other financial institutions, and government contractors from discriminating against individuals and organizations based on their political views.[7]
Critics argue that the anti-ESG law could hit states pursuing these policies with up to $708 million in combined added investment costs, including increases for Florida ranging from $97 million to $361 million.[8] However, supporters of the bill argue that ESG is just a way for leftists to promote policies they could never win at the ballot box.[8] DeSantis considers ESG undemocratic and an elite-driven phenomenon.[8]
The bill has been a priority of House Speaker Paul Renner, R-Palm Coast, and expands on actions taken earlier by DeSantis and members of the state Cabinet to require investment decisions in the Florida Retirement System Defined Benefit Plan to prioritize the highest returns without consideration of ESG standards.[9]
0. “Ron DeSantis signs anti-ESG measures into law” FinTech Global, 3 May. 2023, https://fintech.global/2023/05/03/ron-desantis-signs-anti-esg-measures-into-law/
1. “DeSantis signs ‘ESG’ ban in Jacksonville” Jacksonville Today, 2 May. 2023, https://jaxtoday.org/2023/05/02/desantis-signs-esg-ban-in-jacksonville/
2. “Florida Gov. DeSantis signs ‘ESG’ investing ban during visit to JAXPORT” ActionNewsJax.com, 2 May. 2023, https://www.actionnewsjax.com/news/local/duval-county/florida-gov-desantis-signs-esg-investing-ban-during-visit-jaxport/5WL3MOU5T5CMTBZCOXHGKRPP6E
3. “Florida Gov. DeSantis Signs Bill to Increase Transparency for Prescription Drug Costs” NBC 6 South Florida, 3 May. 2023, https://www.nbcmiami.com/news/local/florida-gov-desantis-signs-bill-to-increase-transparency-for-prescription-drug-costs/3027175
4. “Gov. DeSantis signs ‘Prescription Drug Reform Act’ targeting pharmacy benefit managers” WJXT News4JAX , 3 May. 2023, https://www.news4jax.com/news/politics/2023/05/03/gov-desantis-speaks-on-elder-affairs-at-news-conference-in-jupiter/
5. “DeSantis signs bill targeting ‘woke’ investments, ‘social credit scores'” Florida Phoenix, 2 May. 2023, https://floridaphoenix.com/2023/05/02/desantis-signs-bill-targeting-woke-investments-social-credit-scores
6. “Gov. Ron DeSantis Signs Reform for Florida’s Prescription Drug Market to Increase Accountability, Transparency” SpaceCoastDaily.com, 3 May. 2023, https://spacecoastdaily.com/2023/05/gov-ron-desantis-signs-reform-for-floridas-prescription-drug-market-to-increase-accountability-transparency
7. “Governor Signs Anti-ESG Legislation Declaring “ESG is DOA in Florida”” WQCS, 2 May. 2023, https://www.wqcs.org/wqcs-news/2023-05-02/desantis-signs-anti-esg-legislation-declaring-esg-is-doa-in-florida
8. “DeSantis Continues Crusade Against Woke Policies” Patch, 3 May. 2023, https://patch.com/florida/miami/desantis-continues-crusade-against-woke-policies
9. “Gov. DeSantis signs bill preventing “woke” investment strategies” WCJB, 2 May. 2023, https://www.wcjb.com/2023/05/02/governor-desantis-signs-bill-preventing-investment-strategies-that-consider-woke-standards/
