Kentucky treasurer says 11 banks subject to divestment due to 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 percent 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 the 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, United Nations-convened group of banks that are “committed to aligning their lending and investment portfolios with net-zero emissions by 2050.”

“The fact is that we are among the largest financiers of the U.S. traditional and renewable energy industries, including in Kentucky where we serve some of its largest energy companies and utilities,” A JPMorgan Chase & Co spokesperson said in a statement to The Hill. “We believe our business practices are in line with Kentucky law, and we are hopeful a deeper look at these facts would lead to reconsideration.”

A spokesperson for BlackRock said the company’s “only agenda is delivering the best financial results for [its] clients” and that it does not “boycott” energy companies. 

“On behalf of our clients, we have invested approximately $276 billion in energy companies globally,” A BlackRock spokesperson said in an email. “BlackRock does not boycott energy companies and will continue to be investors across the energy sector.”

Citigroup could not immediately reached for comment. 

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.

– Updated 4:41 p.m.