Kentucky threatens to divest from 11 banks over ESG policies

Kentucky State Treasurer Allison Ball (R) on January 2 issued a statement notifying 11 banks that their environmental, social, and corporate governance (ESG) policies amounted to energy boycotts that harmed the state’s economy according to definitions passed into law last spring. The statement says the banks have 90 days to stop what Kentucky argues are energy company boycotts or face divestment from the state. According to Fox Business:

“Kentucky issued an official notice Monday morning listing 11 banks it accused of boycotting energy companies and which would be subject to divestment within months.

“Kentucky State Treasurer Allison Ball announced that, after a review of their energy and climate policies, the listed banks — which included BlackRock, the largest asset manager in the world, JPMorgan Chase, Citigroup and HSBC among others — were found to be in an active boycott of fossil fuel companies. The Kentucky state government could begin divesting from the firms if they didn’t reverse their boycotts, according to the notice obtained first by FOX Business.

“‘Kentucky is a coal, oil, and gas producing state,’ Ball told FOX Business. ‘Our energy sector helps power America. Kentucky refuses to fund the ideological boycotts of our own fossil fuel industry with the hard-earned taxes and pensions of Kentucky citizens.’

“Kentucky’s Republican-led legislature passed a bill requiring the state government to identify and divest from banks that are determined to be engaging in a boycott of energy and fossil fuel companies. Democratic Gov. Andy Beshear signed the bill, which was endorsed by both the Kentucky Oil and Gas Association and Kentucky Coal Association, into law on April 8, 2022.

“The law directs the state treasurer’s office to publish an annual list of financial firms engaged in energy boycotts. State agencies then must notify the office if they own direct or indirect holdings of the listed companies and send a notice to the relevant companies within 30 days. If the companies don’t halt their boycotts within 90 days of receiving such notice, the state government could divest from their holdings.

“When companies boycott fossil fuels, they intentionally choke off the lifeblood of capital to Kentucky’s signature industries,” Ball said in a statement Monday. ‘Traditional energy sources fuel our Kentucky economy, provide much needed jobs, and warm our homes. Kentucky must not allow our signature industries to be irreparably damaged based upon the ideological whims of a select few.’…

“Arizona, Arkansas, Florida, Louisiana, Missouri, South Carolina, Utah and West Virginia have already announced they will divest hundreds of millions of dollars from banks engaging in energy boycotts. Texas and Oklahoma have taken legislative steps akin to Kentucky’s that will likely soon lead to divestment.”

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