The Florida Legislature has passed a law that bans the issuance of municipal bonds, such as green bonds that use environmental, social or governance criteria. The bill now heads to Gov. Ron DeSantis for his signature.
"Florida may have the statutory authority to abrogate an agreement, but what does that say for things going forward?" asks Joseph Krist, publisher of Muni Credit News. "Why couldn't an anti-development administration do the same thing in reverse to somewhere like the Villages?"
Neal Pandozzi, a partner at the law firm of Bowditch & Dewey, talks with Chip Barnett about what environmental social and governance really means for public finance, separating politics from policy, polemics from principles. (34 minutes)
So far 12 states have enacted ESG statutes with 67 pending statues in 28 states, according to the Morgan Lewis law firm. Florida's anti-ESG bill goes farthest.
Given the increasing SEC scrutiny on disclosure practices in municipal finance, governmental issuers and conduit borrowers [e.g., 501(c)(3) corporations] are taking a fresh look at.