Environmental, Social & Governance (ESG) – Kentucky Issues “Energy Company Boycott” List

On January 3, 2023, the Kentucky Treasurer released https://www.kentucky.gov/Pages/Activity-stream.aspx?n=KentuckyStateTreasurer&prId=101 “… a list of 11 financial companies that are engaged in energy company boycotts… ” defined https://apps.legislature.ky.gov/record/22rs/sb205.html as: “… without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company: 1. Engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to meet environmental standards beyond applicable federal and state law; or …”

– A January 6, 2023 Cadwalader article https://www.cadwalader.com/resources/articles/kentucky-is-latest-state-to-blacklist-financial-institutions-over-esg-policies advises that “… Kentucky is not alone in seeking to financially punish banks deemed insufficiently supportive of the energy industry … But as we have articulated, investment managers have fiduciary duties to clients that they likely would breach if they ignored a material issue, including climate change …”