Compliance May 7, 2023

Desantis Bans ESG Consideration in Florida’s Investment Decisions

The governor sees Florida as a trendsetter in how states can prohibit and ban ESG in state funds. 

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Florida Governor Ron Desantis this week signed into law Senate Bill 302, legislation to prohibit and penalize consideration of environmental, social and governance factors in the state’s investment decisions.

The new law codifies and expands a ban adopted by Florida’s State Board of Administration in August 2022 that prohibits asset allocators from considering ESG factors in their investment decisions. The expansion applies to all funds of the state treasury, as well as all local government retirement plans, investments of local government surplus funds and investment of funds raised by citizen support or direct-support organizations.

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“Through this legislation, Florida will continue to lead the nation against big banks and corporate activists who’ve colluded to inject woke ideology into the global marketplace, regardless of the financial interests of beneficiaries,” DeSantis stated in a press release.

The law prohibits:

  • The use of ESG factors by state and local governments when issuing bonds, including a contract prohibition on rating agencies whose ESG ratings negatively impact the issuer’s bond ratings;
  • All state and local entities from considering or giving preference to ESG as part of the procurement and contracting process;
  • Banks that engage in corporate activism from holding public deposits as a qualified public depository;
  • 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;” and
  • The financial sector from considering social credit scores in banking and lending practices that aim to prevent Floridians from obtaining loans, lines of credit and bank accounts.

The bill also directs Florida’s attorney general, chief financial officer and commissioner of financial regulation to enforce the provisions.

“Just as the Governor fought [former director of the National Institute of Allergy and Infectious Diseases Anthony] Fauci—and won—he’s fighting a woke Wall Street that looks down upon every-day Americans,” Jimmy Patronis, Florida’s chief financial officer states.

In January, a group of 25 states sued to halt the Department of Labor’s rule permitting fiduciaries to use ESG factors when selecting investments for ERISA retirement plans.  A group of 25 Republican attorneys general coalition of 19 states, including Florida’s, sued, along with a fossil-fuel company, a fossil-fuel advocacy group and a Manhattan Institute scholar. The case is pending in the U.S. District Court for the Northern District of Texas, Amarillo Division.

DeSantis said he hopes the Florida legislation will provide a blueprint for other states.

Data & Research May 5, 2023

Women in Retirement Industry Face Dual Pressure

Respondents to WIPN study reported employer support and flexible schedules available for caregivers, but three in 10 women said caregiving responsibilities still negatively affected their career opportunities.

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Three in 10 women in the retirement industry said their caregiving role has negatively affected their career opportunities, according to nonprofit WIPN (which stands for We Inspire. Promote. Network).

Just 4% of women said their caregiving role positively affected their career opportunities. Slightly less than two-thirds of women, 61%, said they were glad that they stayed in the workforce when they became a caregiver.

WIPN’s latest research report, “How The ‘Do-it-All’ Culture is Affecting Women in the Retirement Industry,” surveyed 163 WIPN members serving in retirement-focused financial services, including some who are caregivers.

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“Our proprietary research supports WIPN’s mission of advancing equity and opportunity for women in the retirement industry,” said Jen Mulrooney, WIPN’s president and a vice president at American Century Investments, in a statement. “We hope our findings can further a dialogue as the caregiving generations show lower satisfaction levels. Many women perceive setbacks and obstacles arising from their dual pressures to succeed both at work and at home and to ‘do-it- all.’” 

On the topic of pay and compensation, 71% of respondents said their workplace was not transparent or only somewhat transparent. Only 28% said salary equity studies were conducted in their organization.

More than a quarter, 28%, of WIPN respondents considered but did not take on sales roles. Some women steered away from sales because they found the job incompatible with family demands.

“Sales does offer better pay than a service-related role, the ability to interact with clients and attend industry events to build my brand, and the ability to influence the trajectory of the business,” said one WIPN member, age 38, quoted in the report. “But the drawbacks are many hours away from home/family, plus mostly male colleagues and superiors.”

A positive data point is that nearly all (94%) of women felt their employers were extremely or somewhat supportive of caregivers in general. Furthermore, seven in 10 said they had autonomy over how they spend their day, including remote work or flexible hours to accommodate their caregiving responsibilities.

Mulrooney stated that despite some positive responses, there are still ways employers can improve their support of female employees in the retirement industry.

“A few areas where the retirement industry can improve for women is that companies can re-evaluate parental leave policies, consider caregiver support groups at work, and do more to recruit women in sales roles,” she said.

WIPN’s research partner, Escalent, conducted the survey in January, with the support of sponsors Fidelity Investments and OneDigital.

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