The resolution directs pension-fund employees against considering standards that take into account a company’s rating on climate change and its relationships with employees and the communities where it operates, among other issues.
The Florida Cabinet on Tuesday moved forward with Gov. Ron DeSantis‘ agenda to prevent state pension-fund investment decisions that promote “social, political or ideological interests.” These can include such things as taking into account climate change, an issue that directly impacts Florida, the nation’s ground zero when it comes to climate change.
Despite this, DeSantis, Attorney General Ashley Moody, and state Chief Financial Officer Jimmy Patronis, who serve as trustees of the State Board of Administration, which oversees the Florida Retirement System for government employees, approved a resolution that directed pension-fund managers against using Environmental, Social, and Governance (ESG) ratings when investing state money.
What Does This Mean?
Simply explained, ESG is a set of standards for a company’s behavior used by socially conscious investors. ESG criteria considers how a company safeguards the environment, including corporate policies addressing climate change, and how it manages relationships with employees and the communities where it operates.
For example, environmental criteria may include standards on pollution, direct and indirect greenhouse gas emissions, management of toxic waste, natural resource conservation, and treatment of animals.
Social criteria asks if workplace conditions reflect high regard for employees’ health and safety, and whether the company donates a percentage of its profits to the local community, among other considerations.
To DeSantis, this ESG spells WOKE, which the Republican incumbent uses as an acronym for “Wrongs to Our Kids and Employees” perpetrated, according to him, by those who are too liberal or too politically correct.
In fact, in April he signed the “Stop the WOKE” act, saying he aimed to “take on both corporate wokeness and critical race theory,” a graduate-level academic framework that explores how institutions perpetuate racism which is not taught in K-12 grades across the nations.
“What you’ve seen is a rise of something called ESG […] where they will grade different companies based on how they’re performing on those metrics. And […] they’re putting in all these other criteria rather than just what’s the best investment,” DeSantis said during a press conference in July when he announced plans to prohibit state investments that use ESG ratings.
He also criticized ESG activities at places such as the World Economic Forum, an event that takes place in Davos, Switzerland.
“Things like the World Economic Forum, those policies are dead on arrival in the state of Florida,” declared DeSantis, who is running for re-election in November. He added that he plans to work with legislative leaders to put the changes into state law.
“What I’ve said is the state of Florida is the place where woke goes to die,” he finalized.