Fund managers for Florida’s $228 billion pension funds will no longer be allowed to incorporate ESG considerations in the investment process, according to a new resolution passed by the administration of Governor Ron DeSantis.

The new resolution states that investment decisions must be based only on “pecuniary factors,” or those expected to have a material impact on investment risk and return, and specifies that these factors may not include “the furtherance of social, political, or ideological interests.” The resolution also bans the consideration of these “non-pecuniary factors” in proxy voting activities.

The language used in the resolution is similar to that used by the Trump-era Department of Labor rules intended to limit the use of ESG investing in ERISA plans. While the DOL stated at the time that the primary purpose of the rule was to ensure that plan fiduciaries focus on financial objectives and not sacrifice performance for non-financial considerations, many investors and stakeholders pointed out that the rule would, in fact, have the opposite effect, and end up hurting investors’ financial interests, exposing them to unnecessary risk and potentially harming returns.

Under the Biden administration, the DOL has moved to reverse these rules to remove barriers from the consideration of climate and other ESG factors in the investment process. The Florida resolution specifically states cites that “the Biden Administration has made clear its intention to encourage investment using ESG factors,” as a consideration supporting its anti-ESG rules.

The move forms part of an anti-ESG push by politicians in several Republican-leaning states, which this week also saw Texas release a list of fund managers – including BlackRock, Credit Suisse, UBS and several others – slated for potential divestment, due to their strong ESG credentials and support for net zero investing and advocacy.

Governor DeSantis has been particularly vocal in his anti-ESG stance, and in social media posts following the passage of the resolution called ESG policies “an attempt to impose, through the economy, an ideological agenda that could not win at the ballot box,” and said that “ESG is dead on arrival in Florida.”

In a statement announcing the passage of the resolution, DeSantis added:

“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.”