Kentucky Becomes Latest State To Take On Woke Banks, Asset Managers

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UPDATE: This story has been updated to include a statement from JPMorgan Chase.

The state of Kentucky announced Tuesday that it may pull funds from JPMorgan Chase, BlackRock and nine other financial firms that “boycott” fossil fuel companies.

Kentucky passed a law in April 2022 that directs the state treasurer to publish a yearly list of banks and asset managers that are found to be boycotting energy companies. Kentucky Treasurer Allison Ball published a list of 11 financial firms that are now subject to divestment under the law unless they change their investment policies within 90 days.

“When companies boycott fossil fuels, they intentionally choke off the lifeblood of capital to Kentucky’s signature industries,” Ball said in a statement. “Traditional energy sources fuel our Kentucky economy, provide much-needed jobs, and warm our homes.”

The state’s list includes BlackRock, BNP Paribas SA, Citigroup, Climate First Bank, Danske Bank, HSBC, JPMorgan Chase, Nordea Bank ABP, Schroders, Svenska Handelsbanken, and Swedbank. State entities have 30 days under the law to notify the treasurer’s office if they have any direct or indirect holdings in listed firms and must notify those firms, according to the law.

“Kentucky must not allow our signature industries to be irreparably damaged based upon the ideological whims of a select few,” Ball stated.

JP Morgan Chase is a member of the United Nations Net-Zero Banking Alliance (NZBA), meaning that the firm has agreed to align its lending and investment portfolios toward significantly cutting CO2 emissions by 2050. In 2022, Republican-led states pulled almost $4.5 billion from investing giant BlackRock after alleging that the asset manager’s commitment to environmental, social and corporate governance (ESG) investing compromised its ability to secure returns on investment on behalf of its clients.

“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 spokesperson told the DCNF. “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.”

Kentucky generates 71% of its electricity from coal-fired plants and is the seventh-largest coal-producing state in the U.S., according to the Energy Information Administration. Nearly 144,000 Kentuckians are employed by the energy industry, which represents just under 8% of the state’s employment, according to a state treasury press release.

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

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