The ban would prevent large banks and financial institutions from discriminating against individuals based on their political, religious, and social values.
On Monday, Florida Governor Ron DeSantis announced legislation that would protect Floridians from banks from using Environmental, Social, and Governance (ESG) social credit scores in how they lend.
DeSantis said ESG has become a "mechanism to inject political ideology into investment decisions, corporate governance, and really just the everyday economy," Florida's Voice reports.
"That is not ultimately something that is going to work out well for us here in Florida," DeSantis added.
The ban would prevent large banks and financial institutions from discriminating against individuals based on their political, religious, and social values.
DeSantis said, "Your pension money, your retirement money, is likely invested in some of these funds, and those funds should be done to try to produce the best result for you using the available investment options."
ESG focuses investment not on the fiduciary responsibility to shareholders but around issues of green energy and "social justice initiatives."
"What ESG says is no, we’re not going to do, even if it would do a better return – we’re not going to allow you to invest in certain areas, you’re not allowed to invest in oil and gas, you’re not allowed to invest in disfavored areas,” DeSantis said
In April, Elon Musk said ESG was the "devil incarnate."
According to Investopedia, ESG criteria "are a set of standards for a company's operations that socially conscious investors use to screen potential investments." Environmental criteria include a company's pollution created, treatment of animals and nature, and energy waste. The social criteria in ESG includes looking at whether a company supports LGBTQ rights and encourages diversity. Governance criteria include embracing corporate transparency and creating a diverse board.
"That is a way to try to change people’s behavior. It’s a way to try to impose politics on what should just be economic decisions," DeSantis said.
Florida Senate President Kathleen Passidomo and House Speaker Paul Renner joined DeSantis in Monday's announcement.
According to the press release, the legislation would prohibit "the financial sector from considering so called 'Social Credit Scores' in banking and lending practices that aim to prevent Floridians from obtaining loans, lines of credit, and bank accounts" and prohibit "big banks, trusts, and other financial institutions from discriminating against customers for their religious, political, or social beliefs — including their support for securing the border, owning a firearm, and increasing our energy independence."
The proposal builds on actions by DeSantis to prohibit ESG considerations in state investments.
This is a breaking story and will be updated.
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