Florida’s Anti-ESG Laws: Investment, Banking, and Bond Rules

Florida’s anti-ESG laws, enacted through HB 3 and signed by Governor DeSantis on May 2, 2023, bar state and local governments from using environmental, social, or governance criteria when they invest public money, award contracts, issue bonds, or regulate how banks treat customers. The statutes took effect July 1, 2023, and reach the investment managers who handle state funds, the banks that hold public deposits, and the vendors competing for government work. The common thread is a single rule: public money must be managed on financial grounds, not social or political ones.

How Public Funds Must Be Invested

Florida Statute § 215.47(10) requires the State Board of Administration (SBA) to base all investment decisions solely on “pecuniary factors,” meaning factors the board prudently determines will have a material effect on the risk or returns of an investment, judged against appropriate investment horizons and funding policy. The statute states that the term “does not include the consideration of the furtherance of any social, political, or ideological interests.”¹

The SBA cannot sacrifice return or accept added risk to advance a goal unrelated to the fund’s financial health. Any weight given to a pecuniary factor must reflect a prudent assessment of its actual impact on risk or return.²

The rule reaches further than the state level. Florida Statute § 218.415, as amended by HB 3, extends the pecuniary-only standard to counties, municipalities, and special districts managing their own investment portfolios.

What Investment Managers Must Certify

Under § 215.4755, any investment adviser or manager with discretionary authority over SBA trust fund assets must annually certify in writing that all investment decisions were made based solely on pecuniary factors and did not subordinate participant interests to any nonpecuniary objective. The same manager must certify that it has adopted safeguards against conflicts of interest and a written code of ethics for its officers and employees.³

Each investment contract with the SBA must include the manager’s acknowledgment that it will follow pecuniary-only standards. The state may unilaterally terminate any contract where the manager omits that acknowledgment, submits a materially false certification, or fails to file the annual certification on time. The Florida Attorney General may bring a civil or administrative action against violators and recover reasonable attorneys’ fees and costs if the action succeeds.³

A manager who quietly factors ESG scores into portfolio construction and then signs the annual certification has submitted a false certification, with contract termination and AG enforcement both on the table.

How Banks Must Treat Customers

Florida Statute § 655.0323 makes it an unsafe and unsound practice for a financial institution to deny, cancel, suspend, or terminate services to a person based on political opinions, speech, or affiliations; religious beliefs or affiliations; any factor that is not a quantitative, impartial, and risk-based standard, including factors tied to the customer’s business sector; or the use of any social credit score.⁴

The business-sector protection is the operative part for many Florida companies. A bank that refuses to lend to a firearms manufacturer, a fossil fuel producer, or a private prison operator because of ideological objections to that industry is violating the statute. Decisions on service must turn on risk factors unique to the individual customer, not blanket policies targeting disfavored sectors.⁴

Filing a Complaint

A customer who believes a financial institution has discriminated against them under these rules must submit a complaint to the Florida Office of Financial Regulation within 30 days of the alleged action. Miss that window and the complaint is barred. The complaint must include the customer’s name and address, the institution’s name, and the factual basis for the allegation.⁴

Once a complaint is filed, the office notifies the institution, which has 90 days to submit a response report. The office must begin its investigation within 90 days of receiving the complaint. When the investigation closes, the office issues a findings report to both parties. If it finds a violation, it notifies the customer and the Department of Financial Services.⁴

Public Deposit Consequences

Banks that want to hold state and local government cash in Florida must qualify as a Qualified Public Depository under Chapter 280. HB 3 amended § 280.051 (grounds for suspension or disqualification) and § 280.054 (administrative penalties). A bank found applying social or political criteria to exclude lawful businesses risks losing its qualified depository status and the public deposits that come with it.⁵

What Agencies Cannot Ask Vendors

Florida Statute § 287.05701 governs how state and local awarding bodies evaluate vendors. It applies to state agencies, counties, municipalities, special districts, and other political subdivisions.⁶

An awarding body may not request documentation of, or consider, a vendor’s social, political, or ideological interests when determining whether the vendor is responsible. It may not give preference to a vendor on those grounds. Since July 1, 2023, every procurement solicitation must include a provision notifying vendors of these restrictions.

A company’s carbon footprint report, diversity metrics, or sustainability certification cannot influence who wins a Florida government contract. A vendor without any ESG program competes on equal footing with one that publishes an annual sustainability report.⁶

The Ban on ESG-Labeled Bonds

Florida Statute § 215.681 prohibits government entities from issuing bonds with ESG designations. The ban covers green bonds, Certified Climate Bonds, GreenStar designated bonds, social bonds, sustainability bonds, and sustainable development goal bonds. It reaches labels the issuer applies to itself and labels applied by a third-party verifier.⁷

Government entities also cannot spend public funds or bond proceeds on third-party verification services related to ESG bond designations. That includes certification, second-party opinions, verifier reports on ESG compliance, and post-issuance ESG reporting. Florida also bars issuers from contracting with any rating agency whose ESG scores would have a direct, negative impact on the issuer’s bond ratings.⁷

Bonds issued before July 1, 2023, and contracts executed before that date are grandfathered in.⁸

What These Laws Do Not Cover

The framework is broad but has clear limits. Florida’s laws do not stop private companies from adopting their own ESG policies, publishing sustainability reports, or marketing ESG-labeled products to private investors. The restrictions govern state and local government activities: investing public money, awarding public contracts, issuing public bonds, and regulating how banks treat customers within Florida’s jurisdiction.

Private-sector retirement plans sit outside this framework. The federal Employee Retirement Income Security Act (ERISA) governs 401(k)s and similar plans, and a federal court in Missouri ruled that a state’s anti-ESG rules for investment advisers were preempted by ERISA because they imposed restrictions beyond federal law and created obstacles to ERISA compliance. Florida’s pecuniary-only mandate binds managers of the Florida Retirement System and other public funds; private employers offering 401(k) plans in Florida still follow ERISA’s federal standards.

The SBA can still weigh environmental risks when the analysis ties to financial impact. Examining how a carbon tax would hit a company’s earnings is a pecuniary exercise; divesting from the same company because you oppose carbon emissions is not. The statute aims at the motivation behind the decision, not the outcome.¹

The bond rules in § 215.681 do not prevent Florida governments from financing environmentally beneficial projects. A city can issue bonds to build a solar installation or upgrade water infrastructure. It just cannot market those bonds with ESG labels or pay third-party verifiers to certify them as green or sustainable.⁷

Legal Challenges in Other States

Florida’s statutes have not been struck down by a court, but a related Texas law has. On February 4, 2026, a federal court in the Western District of Texas declared Texas Senate Bill 13 unconstitutional in American Sustainable Business Council v. Hegar. The court held that SB 13’s definition of “boycotting” energy companies, which included “taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with” such companies, swept in constitutionally protected speech such as advocacy against fossil fuel reliance and association with environmental organizations. The court also found the law unconstitutionally vague under the Fourteenth Amendment’s Due Process Clause, ruling that key terms were “not susceptible to objective measurement” and led to arbitrary enforcement. A similar lawsuit in Oklahoma produced near-identical results in 2024.⁹

Florida’s statute is drafted differently, targeting how financial institutions treat customers rather than requiring investment boycotts of specific industries. Still, the Texas ruling signals that courts will scrutinize whether anti-ESG laws are drawn narrowly enough to avoid sweeping up protected speech, and an appeal could produce a broader ruling that reaches every state with similar legislation.⁹

1
Florida Senate. Florida Statutes 215.47 – Investments; Authorized Securities; Loan of Securities
2
The Florida Legislature. Florida Code 215.47 – Investments; Authorized Securities; Loan of Securities
3
The Florida Legislature. Florida Code 215.4755 – Certification and Disclosure Requirements for Investment Advisers and Managers
4
Florida Senate. Florida Code 655.0323 – Unsafe and Unsound Practices
5
Florida Office of Financial Regulation. HB 989 Implementation for Financial Institutions
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The Florida Legislature. Florida Code 287.05701 – Prohibition Against Considering Social, Political, or Ideological Interests in Government Contracting
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The Florida Legislature. Florida Code 215.681 – ESG Bonds; Prohibitions
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The Florida House of Representatives. Florida Code 215.681 – ESG Bonds; Prohibitions
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Harvard Law School Forum on Corporate Governance. Texas Judge Strikes Down Anti-ESG Boycott Law