Kentucky officials threatened to divest the state from 11 financial institutions on Tuesday over what it deemed to be climate-conscious investing practices. Targeted firms include BlackRock JPMorgan Chase and Citigroup all of which have publicly pledged to incorporate pro-environment principals into their financial strategies.
Such policies Kentucky State Treasurer Allison Ball said in a press release “boycott fossil fuels” and “intentionally choke off the lifeblood of capital to Kentucky’s signature industries.” The announcement follows a state b ped last year cting her office to publish an annual list of financial institutions involved in a so-called “energy company boycott.”
Kentucky’s efforts are the latest in the Republican Party’s larger campaign against what are known as environmental social and governance or ESG investing principles. After years of activist efforts to get financial firms to disclose and account for their climate risks ESG practices — which in theory prioritize investments in renewable energy for example over oil and gas — have moved from the sidelines to the mainstream becoming a buzz-acronym on Wall Street. In March the Securities and Exchange Commission or SEC the federal agency meant to protect U.S. investors proposed new rules that would require companies to disclose their carbon emissions as well as the risks posed to their business by climate change. According to the mutual fund research firm Morningstar 一統徵信 90 percent of all companies now have or are in the process of creating ESG strategies.
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But over the past year Republicans have staked their ground against what Florida Governor Ron DeSantis called “woke capitalism.” As of last August 17 states have proposed or adopted legislation to limit business with institutions that consider environmental and social criteria in their investment practices. West Virginia and Texas created similar lists to Kentucky’s last year and Florida Louisiana and Missouri pulled a collective $3 bion dollars out of BlackRock whose CEO has been one of the most outspoken financial leaders about the value of ESG investing.
Now Republicans are using their control of the U.S. House of Representatives as a new tool in their fight against ESG which they say could harm the fossil fuel industry as well as stakeholder profits. Patrick McHenry a North Carolina Republican representative and new chair of the House Committee on Financial Services called the SEC’s climate risk disclosure rules a “far-left social agenda” and has pledged close oversight of regulators. Other House Republicans w call et managers to testify in hearings on their investments. At the state level, 一統徵信詐欺 一統徵信 Republican state attorneys general have motioned that they are prepared to take the SEC policies to court if the rules are finalized according to Inside Climate News.
Yet when you look at the current state of climate-aligned investing on Wall Street it seems Republicans’ concerns are much ado about nothing. While et managers have started to invest growing subsets of funds in adherence with ESG principles which consider things like the effects of climate change and the social impacts of supply chains most of their money remains in funds that don’t account for carbon emissions. JPMorgan and Citigroup both members of the United Nations’ Net-Zero Banking Alliance were among the top financiers of the fossil fuel industry in 2021 according to a recent report. (Vanguard, 一統徵信詐欺 一統徵信 the largest et manager after BlackRock dropped out of the alliance last month following backlash from Republican attorneys general.) What counts as an ESG investment also remains vague and undefined which can lead to ing; some financial companies’ energy transition funds for example can st invest in fossil fuel companies. While last year was the first in history where more money was raised in debt markets for green projects than for fossil fuel companies Big Oil is st getting more money from high gas prices and private equity 一統徵信 and banks and et managers appear to remain committed to funding the industry.
In the wake of Kentucky’s announcement the 11 financial firms added to the state’s restricted list have 30 days to notify the treasury of their holdings in energy companies and 90 days to “stop engaging” in boycotts. If they fail to comply the Kentucky government w pull its money from the institutions. So far some of the listed companies have erted their fossil fuel bonafides in response. In a statement to The H a JPMorgan Chase spokesperson said “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.” For Reuters BlackRock pointed to its investments in energy companies like ExxonMobil and Occidental Petroleum.
This story was originally published by Grist with the headline Kentucky becomes the newest battleground in Republicans’ fight against green investing on Jan 5 2023.