Politics & Government

'Woke banking' policies targeted in legislation proposed by DeSantis

WUSF

Published February 14, 2023 at 7:57 AM EST

As a feud over an African American studies course continues between Gov. Ron DeSantis’ administration and the College Board, the governor said Florida will "look to re-evaluate" its relationship with the organization.

Gov. Ron DeSantis proposed legislation Monday to end what he termed as “woke banking” and ESG policies.

At a press briefing on the legislative proposal DeSantis was joined by Senate President Kathleen Passidomo and House Speaker Paul Renner at Florida Southwestern State college in Naples.

ESG stands for Environmental, social governance policies and such policies typically refer to policies and guidelines that prioritize long-term environmental and social sustainability when making investments and other banking decisions. Some ideas that make up the sphere of ESG include environmental issues such as climate change, as well as social issues regarding diversity, equity, and inclusion.

“What I think what it's evolved into is a mechanism to inject political ideology into investment decisions, corporate governance, and really just the everyday economy,” DeSantis said.

The governor added that ESG polices currently in place at financial institutions are enforced by “elites” to push “woke” political agendas and do not prioritize financial interests.

“Now, this is something that I think is very serious, because I think the policies are bad. I think having a politicized economy is not the way that you want to go,” DeSantis said, “I think ultimately it does represent a threat not just to a smooth, functioning, prosperous economy, but also our very freedom itself.”

DeSantis aims to eliminate ESG practices and “protect Floridians" by prohibiting financial institutions from basing banking and other lending decisions on “social credit scores” as well as prohibiting financial institutions from discriminating customers based on religious, political, and social beliefs.

“We are also going to, in the state of Florida, prohibit the same institutions from using so called social credit scores and making banking and lending decisions. That is a way to try to change people's behavior,” DeSantis said. “It's a way to try to impose politics on what should just be economic decisions. And so, we're making sure to protect this as a sphere of economic decision making, not political activism, we are also not going to house in either the state or local government level ... this woke ESG agenda.”

The governor’s office also seeks to end ESG practices by prohibiting the use of ESG policies in all investment decisions at the state and local level, prohibiting the use of ESG factors when issuing bonds, and prohibiting financial entities from considering, giving preference to, or requesting information about ESG values as part of the contracting process.

The governor clarified that ESG investments are not prohibited on private investments, just state and local entities.

“If those ESG investments are actually the best investments, you can do it, we're not preventing you from doing that at all,” DeSantis said, “If buying solar panels, companies, and all that if that is what is going to return the best. You're not restricted at all.”