Kentucky wants to divest from Citigroup and JP Morgan Chase because it thinks they are too hostile to fossil fuels

BlackRock Inc., Citigroup Inc., and JPMorgan Chase & Co is one of 11 financial institutions facing pushback from Kentucky after being deemed hostile to the fossil fuel industry.

Kentucky Treasurer Allison Ball placed the companies in a “Restricted Financial Institutions” list bundled under state law, saying they were engaged in “energy company boycotts.”

The legislation, which is similar to actions taken in Republican-led states including West Virginia and Texas, would require state entities to divest from blacklisted companies, with some exceptions.

“When companies boycott fossil fuels, they intend to cut off the capital of Kentucky’s signature industries,” Ball said in a press release. release on Tuesday.

The move is the latest in the GOP’s fight against what Republicans see as liberal-leaning financial practices. The strategy, known as environmental, social and governance investment, has drawn intense scrutiny because critics say it is part of a broader Democratic effort to prioritize climate change and other issues. society that harms the fossil-fuel industry.

Ball said in an interview that the law would not prevent banks on the list from underwriting most Kentucky municipal debt. That has emerged as a major concern in Texas, one of the nation’s largest markets for such sales. He said the Kentucky legislation is a “different situation” than the Texas law.

Ball also said it was too early to estimate how much might be at stake in the divestment.

JPMorgan and Citigroup are among the top financiers of the fossil fuel industry in 2021, according to a report through groups including the Sierra Club and Rainforest Action Network.

“The fact is that we are one of the largest investors in the traditional and renewable energy industry in the US, including in Kentucky, where we serve some of the largest energy companies and utilities,” said Trish Wexler, a a JPMorgan spokesperson, in an emailed statement. “We believe our business practices are consistent with Kentucky law, and we hope a deeper look at these facts will lead to reconsideration.”

BlackRock said the company’s “only agenda” is to deliver the best financial results for its clients.

“On behalf of our clients, we have invested approximately $276 billion in energy companies around the world,” Christopher Van Es, a spokesman for BlackRock, said in an emailed statement. “BlackRock is not boycotting energy companies and will continue to be an investor in the entire energy sector.”

Mark Costiglio, a Citigroup spokesman, declined to comment.

Kentucky government entities have 30 days to notify the Treasurer’s office and companies of any assets. The named institutions have 90 days from that point to “stop participating” in boycotts to avoid divestment, according to a notice on the Treasurer’s website. Listed companies have the opportunity to “clarify” whether they are boycotting energy companies.

Government entities are required to sell, redeem, divest or withdraw all publicly traded securities of companies that continue the boycott within one year, although the law makes some exceptions such as when the divestment results in a loss.

the full list of the companies below:

  • BlackRock, Inc.
  • BNP Paribas on
  • Citigroup Inc.
  • Climate First Bank
  • Danske Bank A/S
  • HSBC PLC
  • JPMorgan Chase & Co.
  • Nordea Bank ABP
  • Schroders PLC
  • Svenska Handelsbanken AB
  • Swedbank AB

-With help from Silla Brush.

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