Last week, Gov. Ron DeSantis, R-Fla., struck a blow against the woke left when Florida’s State Board of Administration, on which he sits, adopted his proposal directing the state’s fund managers to invest state funds "in a manner that prioritizes the highest return on investment for Florida’s taxpayers and retirees without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement."
The Florida SBA is an investment-management organization established by the state’s constitution. It is governed by a three-person board of trustees that includes the governor, the state’s chief financial officer, and the state’s attorney general.
It manages almost three dozen funds, including the Florida Retirement System Pension Plan and the Florida Hurricane Catastrophe Fund. As of May, the SBA had about $240 billion under management.
The resolution specifies that investment decisions "must be based only on pecuniary factors [which] do not include the consideration of the furtherance of social, political, or ideological interests" and requires that the SBA "may not sacrifice investment return or take on additional investment risk to promote any non-pecuniary factors" when making investments or casting proxy votes.
Further, the resolution directs the SBA to "conduct a comprehensive review and prepare a report of the governance policies over the voting practices of the Florida Retirement System Defined Benefit Pension Plan."
That DeSantis felt a need to take this action is a sad commentary on the current state of play with investment funds. Many people — most? — assume that investment decisions are already made on the basis of an assessment on anticipated rates of return, with a view to maximizing them, without any other factors being brought into consideration.
Those people are wrong.
"Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity," said DeSantis.
"With the resolution we passed today, the tax dollars and proxy votes of the people of Florida will no longer be commandeered by Wall Street financial firms and used to implement policies through the board room that Floridians reject at the ballot box.
"We are reasserting the authority of republican governance over corporate dominance and we are prioritizing the financial security of the people of Florida over whimsical notions of a utopian tomorrow."
DeSantis’s move is only the latest in a growing pushback against a decades-long movement by the radical left to achieve through backroom corporate maneuvers what it cannot achieve in broad daylight through the legislative or political process.
Earlier this month, for instance, 19 state attorneys general wrote an eight-page letter to Larry Fink, the CEO of BlackRock, the world’s largest asset management firm, declaring the signatories’ belief that BlackRock is using "the hard-earned money of our states’ citizens to circumvent the best possible return on investment, as well as their vote."
Further, "BlackRock’s past public commitments indicate that it has used citizen’s assets to pressure companies to comply with international agreements such as the Paris Agreement that force the phase-out of fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States.
"These agreements have never been ratified by the United States Senate. The Senators elected by the citizens of this country determine which international agreements have the force of law, not BlackRock."
And just last week, 18 states joined Missouri Attorney General Eric Schmitt’s investigation into ESG ratings company Morningstar and its subsidiary, Sustainalytics for alleged consumer fraud and unfair trade practices.
Today’s efforts by the woke left to achieve radical policy goals via corporate action rather than through legislative or political action are nothing new. It’s been going on for decades.
First in his 1962 book and then exposed to a larger audience in a 1970 article in The New York Times Magazine, writing about what was then called the "social responsibilities of business," Nobel laureate Dr. Milton Friedman wrote that "the doctrine of ‘social responsibility' taken seriously would extend the scope of the political mechanism to every human activity.
"It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attainted without collectivist means.
"That is why, in my book 'Capitalism and Freedom,' I have called it a 'fundamentally subversive doctrine' in a free society, and have said that in such a society, 'there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.'"
Friedman is right. So are DeSantis, Schmitt, and the other attorneys general who have joined in the fight against ESG.
Jenny Beth Martin is the cofounder of Tea Party Patriots and Honorary Chairman of Tea Party Patriots Action.
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