Kentucky legislators are considering new anti-ESG investment regulations to further cut the state’s financial ties to companies exiting the fossil fuel industry.
Attorney General David Cameron expands disclosure rules on environmental, social and governance investments by major banks and companies, empowering states to stop doing business with companies that don’t do business with fossil fuel companies confirmed its support for
“Kentucky is an energy state,” he said in a statement. “This is why we are protecting Kentucky from ESG movements that are destroying federal competitive advantage and paralyzing the economy.”
In 2021, the Kentucky legislature passed a bill that would allow state officials to stop doing business with banks, investment firms, and other financial service providers that have anti-fossil fuel policies. Proponents of the law say it could prevent companies from taking actions that threaten the returns of numerous publicly managed financial portfolios. Many states have enacted laws banning banks from trading in municipal bonds if they are seen to be against the firearms and fossil fuel industries.
The law requires state treasurers to keep a list of companies that do not do business with fossil fuel companies, and the state does not do business with any of the listed companies in excess of $1 million a year. I am terminating my relationship with a company that
“Large investment firms are colluding to force fossil energy companies to cannibalize existing businesses and divert time and attention away from increasing shareholder returns,” the bill states.
Discussions regarding the expanded disclosure requirements came amid an ongoing dispute between Cameron and a major investment firm in civil court in Franklin County.
In October, Cameron called on Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo to provide additional disclosures about their ESG-related decisions and investments, saying the banks would A lawsuit was filed to stop the action.
“These institutions see climate risk as a financial risk and seek to protect their assets,” the legal action continued. Kentucky has enacted laws prohibiting such banks from controlling state pension dollars or securing state contracts if they are deemed to have there is.”
A countercomplaint filed by the bank last month said President Cameron’s decision to issue subpoenas to six of the country’s largest financial institutions was an attempt to “punish banks and investment firms that limit their investment in fossil fuel companies.” The Kentucky Bankers Association also challenged Cameron’s authority to request detailed information from six major banks.
Kentucky’s ESG law allows ESG-conscious companies deemed profitable to continue working with the state.
The Institute for Energy Economics and Financial Analysis, a policy agency based in neighboring Ohio, said in a report examining evolving regulations in Kentucky, “Climate change is particularly relevant to banks and housing developers. It’s part of an aggressive investment strategy.” “In general, ESG rules are a widely accepted set of guidelines used in decision-making.”
Leading companies decoupling investments from the fossil fuel industry are cautiously reassessing their investments, betting on a changing and dynamic energy economy with diminishing demand for gas and oil, according to an IEEFA report.
“Most of the world’s leading businesses are taking steps to protect themselves from the risks of climate change.” .”