Florida Department of Financial Services’ CFO Jimmy Patronis has issued a directive barring asset managers within the state’s deferred compensation program from investing their client’s money in financial products with ESG standards.
Patronis announced the directive in a January 23 press release, labeling the ESG movement as “undemocratic.” He argued that ESG “constrains companies’ ability to pursue the best returns possible, and many of its values run counter to the values of everyday Floridians.”
“No doubt, many participants are just trying to save a little more for retirement and have no idea that some of their compensation may be routed to funds that are more focused on Left wing politics than returns,” Patronis said. “We’ve placed the burden on these fund managers to move these dollars – and if they don’t – [then] they’re in violation of our contracts and we’ll move on to someone else.”
Florida’s deferred compensation plan is a retirement plan for employees of the state. More than 93,000 State of Florida employees are enrolled in the plan, with total assets equaling $5.1 billion.
Patronis added that the Department of Financial Services is engaging with specific fund managers on potential ESG products for removal from the retirement plan, including the Neuberger Berman Sustainable Equity Fund, the VALIC Company I Socially Responsible Fund, and the Vanguard FTSE Social Index Fund.