Florida Governor Ron DeSantis is continually involved in controversies with companies in his state.
But one important company seems to be wondering whether it should remain there.
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The governor's clash with Disney (DIS) has been a conflict, famously, for a long while.
Now, the state's Government and Corporate Activism Act, which will be implemented July 1, has caused a bank to reconsider its location in Florida.
The controversy surrounds environmental, social and governance (ESG) issues. The legislation would penalize state-registered banks if they deny services to specific businesses.
Oil, gas and weapons businesses are spelled out as points of contention.
In reaction, Climate First Bank, a St. Petersburg firm that says it is dedicated to the environment and sustainability, is thinking about leaving the state.
"The environmentally focused de novo, which launched in 2021, bills itself as a 'values based-bank,' focused on promoting sustainable business practices by providing banking services and loans to firm’s with a strong environmental, social and governance mission," Banking Dive reported.
Climate First Bank Is Weighing Its Options
Climate First Bank had taken some steps toward compliance with the law that DeSantis signed in May.
"The bank nixed its exclusionary list, which outlined the sectors it has said it won’t do business with, such as the fossil fuel sector or other extractive industries," Banking Dive wrote.
It also "eliminated all references to ESG on its website and in its internal dialogue, and replaced them with terms like 'values, mission or corporate social responsibility,'" CEO Ken LaRoe said, according to Banking Dive.
"We can change to another state -- different states have different requirements -- so we’d have to investigate all of that. But yes, we're absolutely considering that," LaRoe reportedly said.
"No one’s called and said, 'Hi, gotcha. Now, you have to take this application.' There’s been none of that. And I really don’t think there will be," LaRoe said, according to Banking Dive. "But if, for instance, a gun manufacturing company wants a loan, we now have to take the application and process it just like we would any other loan."
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LaRoe Defends His Company's Mission
LaRoe had more words about the situation his bank finds itself in. He was very clear about his feelings on the subject, and did not reveal any weakness in his adherence to his firm's values.
"We’re not going to change our DNA. We were founded on the premise of changing finance to finance change and doing good, while concurrently returning market leading returns for our investors," he said. "And I think at the end of the day, we are still that."
He confronted a question about whether the bank's name was controversial.
"I said, 'Absolutely not. It defines the business, our mission and our values and everything,'" he said, according to Banking Dive. "Here we are, with the name Climate First Bank, squarely in the crosshairs, and I’m kind of proud of it."
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