Interview: How will businesses view DeSantis' crackdown on corporations favoring environmental and social causes
Gov. Ron DeSantis is going after companies that consider environmental or social issues -- like climate change, immigration, gun safety and racial justice -- as part of their investment strategies.
DeSantis labels them as "woke capital" and denounces what he calls "environmental social governance," or ESG.
He wants to prohibit decisions by banks and investment firms that "discriminate" based on ESG scores.
Robert Hebeler teaches business at Rollins College. He spoke with WMFE about why some businesses take social stances.
"Businesses typically take stances on social issues given that it's based on their strategic plan or aligned with the senior leadership's values and beliefs. ...
Those social issues that are aligned with their strategic plan and/or the values and beliefs of their senior leadership have the largest impact on shareholder value, also brand image and also the ability to recruit and retain employees."
An eye on their consumers
Hebeler said social issues "by their nature are divisive."
"So when we say consumers want this or want that, as a business perspective, is that majority my customers? Is that a minority of my customers? Do I respond to the interests of (a) majority of my consumers or a minority of my consumers?
"And that would be determined whether you could or should voice your opinion on one social issue or another."
Possible business reaction to ESG crackdown
Hebeler said businesses generally "respond negatively to any regulation or penalties regarding their movement or behaviors."
"I feel that the company should take this as an opportunity to internally reflect and debate their stance on social issues. And to see if these social issues are aligned with their consumers, their employees and shareholders."
An infringement on rights and freedom?
Hebeler says some business will see the governor's plan as going against their freedom.
"Certain businesses certainly will see this as an infringement upon their rights to freedom of voice, freedom of movement, freedom of behavior. Other businesses will look at it as, well, an opportunity maybe to fine tune their own social voice or how to target it better to get the measurable results.
"... Banks typically will always avoid or hesitate with any restrictions that restrict their behaviors or loan policies or guidelines for their investment. So this this will be seen as restrictive for banks. That's one more, one other item that they can or can't do."
Will this hurt investments in Florida?
Hebeler addressed the question of whether DeSantis' plan will prevent companies that focus on certain concerns, like green issues or uplifting impoverished communities, from coming into Florida and making investments?
"I would certainly hope not, though ESG is proposed to be restrictive as an investment criterion. It should not alienate those companies that still want to pursue those issues.
"It may slow them down, may increase cost to do business, but I don't think it will restrict them from doing business in Florida."