DeSantis launches 18-state anti-ESG alliance

President Joe Biden vowed to veto the resolution to keep the rule in place.

The new rule – “Caution and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” – went into effect Jan. 30 and supports the department’s position that fiduciaries cannot sacrifice investment returns or take on higher investment risks as a means of promoting the attendant goals of social policy.

But opposition to the rule has been fierce in Congress and across the country, including lawsuits like the one filed in January by Republican attorneys general from 25 states.

“The spread of ESG across America is a direct threat to the American economy, personal economic freedom, and our way of life, placing investment decisions in the hands of an awakened mob to bypass the ballot box and inject political ideology into investment decisions, corporate governance, and the everyday economy,” it says. in a political statement by a group of governors on Thursday.

The governors said they will protect people from the ESG movement by, among other things, “blocking the use of ESG in all state and local investment decisions, ensuring that only financial factors are considered to maximize return on investment while protecting retirees.” as well as taxpayers.”

They can also remove ESG considerations from state and local governments when issuing bonds, or prohibit public fund managers from considering ESG factors when investing taxpayer money.

What’s more, the governors said they could prohibit the “financial sector from considering so-called ‘social credit ratings’ in banking and lending practices designed to prevent citizens from accessing financial services such as loans, lines of credit and bank accounts.”

Mr. DeSantis and the Republican governors of 18 other states are in the alliance: Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia and Wyoming.

Ali Khawar, First Deputy Assistant Secretary, Office of Employee Benefits, Department of Labor, said on Monday in Pensions and investments‘ A certain contribution of the Eastern Conference in Orlando, Florida that the political reaction to the rule is misguided.

“Unfortunately, there is a huge amount of misinformation about what the latest rule actually did,” Mr Khawar said. “The last rule is pretty neutral. It doesn’t require an ESG review, it doesn’t oblige everyone to buy property in the Amazon rainforest and do whatever they can to stop the cause of climate change or whatever. What it does says you must be a prudent fiduciary.”

Pension industry experts also consider this rule to be neutral.

In a separate news release Thursday, Mr. DeSantis said Florida is leading the way in combating “the detrimental effects of the ESG regime” by instructing public pension fund managers to move away from ESG and “instead focus on maximizing return on investment for Florida.” taxpayers and pensioners.

He added: “We will not sit idly by as the stability of our country’s economy is threatened by awakened leaders who put their political agenda ahead of their clients’ finances.”

Florida Chief Financial Officer Jimmy Patronis announced in December that the state Treasury Department was ending BlackRock’s management of the state’s $2 billion long-term portfolio and its $232.5 billion short-term investment fund for the Florida State Council of Administration in Tallahassee. to what he called “BlackRock CEO Lawrence D. Fink’s campaign to change the world” in using environmental, social and governance standards.”

And at the SBA trustee meeting in January, they approved $181.7 billion in investment policy changes to Florida’s pension system that would remove ESG considerations from defined benefit plan investment management.

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