The Kentucky treasurer on Tuesday released a blacklist of banks that have boycotted firms in the fossil fuel business, making them subject to divestment by state entities after 120 days.
Among the financial institutions on the list are Black Rock, BNP Paribas, Citi Group, Climate First Bank, Dankse Bank, HSBC PLC, J.P. Morgan Chase & Co., Nordea Bank ABP, Schroders PLC, Svenska Handelsbanken AB, and Swedbank AB. The roster will be updated on at least an annual basis.
The list was authorized by a state law, enacted in April, which stipulates that the treasurer, currently Allison Ball, “shall prepare and maintain, and provide to each state governmental entity through publication on the Treasurer’s official Web site, a list of all financial companies that, to the Treasurer’s knowledge, have engaged in energy company boycotts.”
If the company does not cease engaging in the boycott within 90 days of receiving notice of its blacklist status, state entities can sell, redeem, divest, or withdraw all publicly traded securities from it, according to the legislation. Those entities include the departments in the state executive branch, state boards and commissions, and the pensions system, Ball told National Review.
Before the banks were added to the list, the state scoped out their financial activities for ideologically-motivated activism, such as in climate policies. “This is an outgrowth of ESG movement,” she said.
Isolated business decisions on the part of the banks to pull money from energy companies would not necessarily merit blacklisting, Ball said, confirming her state’s support for a free market approach. On the whole, however, the state uncovered blanket boycotting of the fossil fuel industry among many of the companies listed, she added.
Ball, who said she hails from the coal fields of eastern Kentucky, said the industry, including oil, gas, and coal, makes up a significant percentage of the state’s labor market and economy. The Kentucky coal association, a union representing the state’s coal workers, was “very involved” with the legislation when it passed last year, Ball noted.
“It doesn’t make sense to use taxpayer dollars for investment purposes, including in pensions, to help companies that actively harm workers,” she said.
As another penalty for companies that refuse to budge on their boycotts, the state may opt not to enter into future contracts.
“When companies boycott fossil fuels, they intentionally choke off the lifeblood of capital to Kentucky’s signature industries. 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,” Ball said in a press release.
Kentucky is not the first state to enact anti-boycotting legislation targeting environmentally progressive companies. In July, West Virginia blacklisted five banks, and Texas followed soon after with its own list.