Central Florida banker Kenneth LaRoe has always considered himself an environmentalist. But it wasn’t until after he sold his first bank and took an extended road trip with his wife that he decided to open a bank dedicated to eco-friendly practices.

“At 50, I was wondering what I could do to help save the planet,” said LaRoe, who comes from a farming family in Eustis and until recently was a Republican. Inspired by Yvon Chouinard, the legendary mountain climber who founded the Patagonia company, LaRoe came up with the idea for First Green Bank.

Over the next nine years, he built up First Green Bank’s business and sold it to the Stuart-based Seacoast Bank, one of the largest community banks in Florida, for $115 million. LaRoe then came up with Climate First Bank, devoted to the principles of Environmental, Social and Governance, or ESG.

“ESG was not in the common vernacular till 2018, and even then most people never heard of it,” he said.

But LaRoe said a measure being pushed through the Legislature could threaten his bank’s existence.

Legislation that meets one of Gov. Ron DeSantis’ goals to crack down on government and corporate activism would prohibit state agencies and local governments from investing tax dollars into funds that follow ESG guidelines. It also would prevent them from depositing money with banks that embrace ESG policies.

The measure also would prohibit banks from denying services based on a client’s religious, social and political leanings or if they are in the firearms or fossil fuel industries.

If it becomes law, LaRoe said, it will “prompt a lot of lawsuits against banks, which will then sue the state.”

Climate First is a state-chartered community bank, approved by the state Office of Financial Regulation, which falls under CFO Jimmy Patronis. Patronis has been a vocal crusader against ESG, going as far as taking $2 billion away from BlackRock — the largest asset management firm in the world —and giving it to other asset managers that also happen to support ESG.

“We are a bank. We take deposits and loan the money out, even from an auto body shop down the street with a Trump sign out front,” LaRoe said. But if that auto body shop was pouring oil into the streets, he said, “we wouldn’t do business with them.”

LaRoe started working on the charter for Climate First Bank just as COVID-19 hit, and he opened its doors in 2021 in Winter Park. Once again, his concept has been a hit with customers. The bank has also developed a niche specialty lending money to install rooftop solar systems.

“It skyrocketed in the last four months,” LaRoe said. “We are seeing more and more installers.”

Forty percent of the bank’s business is solar roofing, or $8 million out of $20 million a month. He estimates that by the end of the year Climate First Bank will be doing $20 million a month just on solar.

“It’s big for a small bank in Florida,” LaRoe said.

Climate First may be the only bank in Florida that has a list of published companies that it won’t do business with: those in fossil fuels, for-profit prisons and gun sales or manufacturing.

“It’s like they took our list and put it in their bill,” LaRoe said. “It feels like the bill is aimed at us.”

The bank already can’t discriminate on the basis of age, race, religion or gender. “Now we’re being told we can’t discriminate against guns, fossil fuel and other stuff.”

Climate First is also the only Florida bank that is a state “legal benefits bank,” a categorization that requires it to state its public benefit and give an annual report of its activities.

“This ESG legislation is in direct conflict with that legal benefits law, not to speak of all the federal laws and agency rules it conflicts with,” LaRoe said. “We are supposed to do prudent underwriting, and we can’t underwrite what we don’t know about.”

For example, the bank doesn’t make loans to the fracking industry because they know so little about it. “That would be called a dumb loan,” he said.

Florida is among several Republican-controlled states that have been pushing rules to blacklist banks and investors that use ESG as a business model or analytic tool.

The American Bankers Association supports allowing banks to be free to lend and invest or not with whoever they want, without government interference as long as they don’t violate fair lending laws or engage in discriminatory practices. But Florida Bankers Association President Alex Sanchez has said that banks shouldn’t be “the climate police.”

DeSantis has said that banks and financial institutions that practice “woke banking,” and “inject political ideology into investment decisions, corporate governance, and really just the everyday economy” are putting politics above sound fiscal policy.

Supporters of the measure say it will eliminate discriminatory banking practices and prevent investments made on “political virtue-signaling through radical ESG investment strategies,” House Speaker Paul Renner said.

“Those with the responsibility of investing state dollars, like state employee pension fund managers, have a primary fiduciary duty to act in the sole financial interest of their client and should not capitulate to the ESG demands of martini millionaires,” Renner said.

The bill has already been approved by the House by a vote of 80-31, and it’s set to go before the full Senate this week. It seems guaranteed to pass, despite opponents saying it is in direct conflict with existing state banking laws and will cost investors in state pensions millions of dollars.

LaRoe said trying to stop him from doing business with the people he chooses seems like a slap in the face of the Republican embrace of free enterprise and smaller, less restrictive government.

“It’s all nonsense. If hypocrisy was an Olympic event the Republicans would be gold medalists. It’s all marketing for DeSantis, branding for him,” LaRoe said. “The people we work with every day love us ... [for] the difference we’re making in the world.”