Kentucky threatens divestment of 11 banks over energy company ‘boycotts’

Kentucky State Treasurer Allison Ball threatened to divest from 11 banks that have “boycotted” energy companies in press release published Tuesday.

The Kentucky General Assembly passed a bill last year that directed the state treasurer to annually publish a list of financial companies that engage in energy “boycotts.” According to the press release, banks who continue to avoid energy companies will be subject to divestment from the state.

“When companies boycott fossil fuels, they intentionally choke off the lifeblood of capital to Kentucky’s signature industries,” Ball said in the release. “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.”

The energy sector represents 7.8 percent of total Kentucky state employment, according to the press release. The released added that the energy industry accounts for 94.5% of Kentucky’s electrical power generation, which heats more than half of Kentucky homes, “while boasting the 12th lowest average electricity prices in the nation.”

Within 30 days of this list being published, state agencies must notify the treasury if they have indirect or direct holdings in any of these institutions, and send a notice to those institutions. The companies will then have 90 days to end their “boycott” of energy companies, or they risk being divested from.

“Kentucky is a coal, oil, and gas producing state,” Ball said in an interview with 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.”

The list of 11 banks accused of “boycotting” energy companies included Citigroup Inc, JPMorgan Chase & Co and BlackRock Inc. Citigroup and JPMorgan Chase & Co are each members of the Net-Zero Banking Alliance, which is an industry-led, U.N.-convened group of banks that are “committed to aligning their lending and investment portfolios with net-zero emissions by 2050.”

In 2022, other Republican-led states including Texas and West Virginia announced similar pledges to punish banking institutions that do not engage with energy companies.