The state of Kentucky has issued a warning to 11 major financial companies, including BlackRock, BNP Paribas, Citigroup, Climate First Bank, Danske Bank, HSBC, JPMorgan Chase, Nordea Bank, Schroders, Svenska Handelsbanken, and Swedbank, over their alleged “boycott” of energy companies.
These companies have been accused of “intentionally choking off the lifeblood of capital to Kentucky’s signature industries” by Kentucky State Treasurer Allison Ball in a press release.
In response, state government entities in Kentucky have been required to divest from these companies if they do not stop their alleged “boycott.”
“When companies boycott fossil fuels, they intentionally choke off the lifeblood of capital to Kentucky’s signature industries,” Treasurer Ball said in a statement. “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.”
This move by Kentucky follows the passage of a law in 2022 that directed the state treasurer’s office to publish a list of companies actively engaged in energy boycotts and put them on a path toward divestment.
The companies have been labeled as “Restricted Financial Institutions” under Kentucky law and have been given 90 days to comply with the divestment request.
State government entities have 30 days to notify the treasurer of any holdings they have in these companies and submit a written notice asking the companies to stop their alleged “boycott.”
The move by Kentucky is part of a wider effort by conservative states to distance themselves from companies involved in the environmental, social, and corporate governance (ESG) movement due to concerns about mixing profits with left-wing social and political causes.
In the past year, other states such as West Virginia and Texas have also boycotted several financial firms over their ESG practices.
Energy production makes up a significant portion of Kentucky’s economy, with the sector accounting for 7.8% of total state employment (nearly 144,000 jobs) and nearly 95% of the state’s power generation.
It is not clear from the information provided what specific actions or policies the financial firms in question have taken that have led to the accusations of a “boycott” or what the divestment process would involve.
Spokespersons for JPMorgan Chase and Citigroup declined to comment on the matter.
