Senate Passes Bill Banning State Investments in Anything Republicans Consider ‘Woke’

An expansion of the governor’s relentless war on what he calls “woke” culture, the legislation has been called “an attack on free speech and an affront to the free market.” 

The Republican-majority Florida Senate on Wednesday approved the Government and Corporate Activism bill (House Bill 3), which bars state and local governments from making investment decisions on the basis of environmental, social and governmental (ESG) considerations. They will also be prohibited from investing in companies that do. 

A top priority for Gov. Ron DeSantis, the bill bans investment managers from issuing ESG bonds or signing contracts with rating agencies that use ESG guidelines such as carbon emissions, worker pay, and executive diversity. It also includes provisions that would ensure that public pension plans and other state-controlled funds cannot consider ESG when investing. 

RELATED: DeSantis Goes After Companies ‘Imposing Woke Ideology on the Economy’

In fact, the state’s Chief Financial Officer, Jimmy Patronis, has already removed $2 billion of investments from BlackRock, an investment management firm, over the issue.

Affecting Private Banking

The proposed new legislation also aims to influence private banking. For example, if a bank refuses to finance a customer based on the customer’s “support of the state or Federal Government in combating illegal immigration,” it could face financial and legal retaliation. 

Anthony DiMarco, a lobbyist for the Florida Bankers Association, warned lawmakers that HB 3 could also create a severe compliance problem for banks, especially small community banks.  

An Attack on Free Speech

After a debate in which Democrats argued the move interferes with private companies’ decisions and limits the state’s options for investments, which can boost interest costs, the bill was approved on a party line 28-12 vote.  

RELATED: Floridians Are Paying the High Legal Cost of DeSantis’ Culture Wars

Critics of the new legislation see it as an expansion of DeSantis’ relentless war on what he calls “woke” culture.

“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.

Sen. Lori Berman, (D-31) a Lantana Democrat, called the legislation “an attack on free speech and an affront to the free market.” 

HB 3 passed through the House last month on an 80-31 party line vote and is now headed to DeSantis’ desk.