Florida League of Cities

Government and Corporate Activism (Monitor) – Passed 

CS/CS/HB 3 (Rommel) attempts to eliminate the consideration of environmental, social and governance (ESG) from government investment strategies, procurements, bond issuances and use of banks. Provisions relevant to local governments include: 

•Requires fiduciaries of all government retirement plans to make investment decisions that consider only pecuniary factors that do not include the consideration or furtherance of any social, political or ideological interests. By December 15, 2023, and by December 15 of each odd-numbered year thereafter, each government retirement system or plan shall file a comprehensive report detailing and reviewing the governance policies concerning decision-making in vote decisions and adherence to the fiduciary standards as required by the bill. 

•Prohibits local governments from the issuance of bonds used to further an ESG purpose. The bill defines ESG bonds to include bonds that will be used to finance a project with an ESG purpose including, but not limited to, green bonds, Certified Climate Bonds, GreenStar designated bonds and other environmental bonds marketed as promoting an environmental objective; social bonds marketed as promoting a social objective; and sustainability bonds and sustainable development goal bonds marketed as promoting both environmental and social objectives. 

•Requires that any contract between a government entity and an investment manager include provisions requiring a disclaimer be included in any communications discussing ESG interests from the investment manager. The disclaimer must state: “The views and opinions expressed in this communication are those of the sender and do not reflect the views and opinions of the people of the State of Florida.” 

•Amends the definition of a “qualified public depository” to prohibit government entities from depositing funds in banks that make it a practice to deny or cancel services of its customers based on a person’s political opinions, speech, affiliations, lawful ownership or sales of firearms, production of fossil fuels or other factors related to ESG. Pursuant to current law, all public deposits may only be deposited in a qualified public depository.

•Amends procurement requirements of all governmental entities to prohibit government bodies from giving a preference to vendors based on ESG factors or requesting information from vendors related to ESG. 

Effective date: July 1, 2023. (Cruz)