Chief Financial Officer Jimmy Patronis spurned a request by congressional Democrats for information related to Florida's investment performance after the state divested from a firm that used environmental, social and corporate governance (ESG) ratings when making investment decisions.
Democratic U.S. Reps. Luis Correa of California and Jerry Nadler of New York sent a letter to Patronis asking for the data, and criticizing the moves by Florida, Texas and other states to eschew ESG-minded investing. The letter cited a study by the University of Pennsylvania's Wharton School of Business that showed Texas' rejection of such investors cost that state $500 million in unrealized interest on its bonds.
"When states substitute politics for the reasoned judgment of investment professionals, taxpayers foot the bill — along with the teachers, firefighters, and others who served their states and depend on well-managed public pension funds to safeguard their retirement savings," Correa and Nadler wrote.
Patronis was nonplussed by the letter and pointed to Florida's positive migration from other states as evidence the state's anti-ESG stance is sound.
"The people they represent in New York and California are moving to the Sunshine State in droves and they're bringing their pensions with them — and firing off an angry letter isn't going to change that," Patronis' Chief of Staff Frank Collins said in a prepared statement. "Rather than attacking Florida, they should be asking for help."
Florida, led by Gov. Ron DeSantis, was one of the first states to move away from investing in companies that use ESG factors. Patronis divested $2 billion from BlackRock in December 2022 over its ESG policies. In 2023, DeSantis signed a measure banning state and local governments from using ESG factors in their investment decisions, codifying an earlier move by the State Board of Administration, which oversees the state pension and other investment funds.
"Ultimately, the CFO only cares about returns on investment," Collins said. "Those pension funds are for public servants, including firefighters and police officers, and the CFO believes using their pension money for political ends, when these heroes worked so hard for them, is abhorrent."
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