JPMorgan, Citi among firms facing potential divestment by Kentucky over energy ‘boycott’

BENGALURU: Kentucky on Tuesday warned 11 major financial companies, including Citigroup Inc, JPMorgan Chase & Co and BlackRock Inc, of potential divestment over their “boycott” of energy companies.

State government entities must notify the Treasurer of direct or indirect holdings in the companies in the list. They must also write to the firms, asking them to stop the “boycott” failing which, they could be subject to divestment, Kentucky State Treasurer Allison Ball said.

Republicans have been ramping up pressure on the finance industry over what they say are their increasingly aggressive environmental, social and governance (ESG) practices.

In the past year, other states like West Virginia and Texas have also boycotted several financial firms.

A JPMorgan spokesperson said “we believe our business practices are in line with Kentucky law, and we are hopeful a deeper look at these facts would lead to reconsideration,” adding that the bank was among the largest financiers of the US traditional and renewable energy industries, including in Kentucky.

The bank finances energy companies that include American Electric Power and Duke Energy Corp in the state, a source familiar with the matter said.

Citigroup declined to comment, while BlackRock pointed to a recent testimony in Texas by Dalia Blass, its head of external affairs group.

In the testimony, Blass said BlackRock is a significant investor in many energy companies like Exxon Mobil Corp and Occidental Petroleum Corp.