Ky. bill would divest from financial companies that boycott fossil fuels
More than a hundred banks around the world have committed to divesting from fossil fuel resources to combat the climate crisis as part of the Net-Zero Banking Alliance.
This is a problem for some Kentucky lawmakers. Not climate change, but the divestment.
On Wednesday, the Senate Natural Resources Committee passed Senate Bill 205, which would require state government to stop doing business with financial companies engaging in these energy boycotts.
Sen. Robby Mills of Henderson, the bill’s Republican sponsor, specifically cited the Net-Zero Banking Alliance as an example of groups that are “starving” fossil energy companies of capital.
“Senate Bill 205 makes it clear that Kentucky stands with our fossil fuels companies and Kentuckians that work hard everyday to produce these low-cost resources and power for our nation,” Mills said.
The bill would require the state treasurer to create a list of financial companies the state works with that have engaged in energy boycotts. The state would then be required to stop doing business with any financial companies that refuse to give up the energy boycotts.
There are exceptions for some investments, but even in those circumstances the state would request financial companies that engage in the boycotts be removed.
Although climate change was the subtext of the entire discussion on Wednesday, not one lawmaker directly brought it up. That’s even though earlier this week, the world’s foremost body on the science of climate change issued its latest dire warning that humankind has not done enough to end its reliance on fossil fuels or adapt to a warming planet.
Our reliance on fossil fuels has already warmed the planet around 1.1 degrees Celsius since the dawn of the industrial era. There remains only a limited window for humankind to act and avoid the worst impacts of climate change.
“The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5°C (2.7°F). Even temporarily exceeding this warming level will result in additional severe impacts, some of which will be irreversible,” according to a press release from the United Nations’ Intergovernmental Panel on Climate Change.
Regardless of these facts, Senate Bill 205 states that “American and European fossil energy producers” are “among the most socially and environmentally responsible” companies in the world.
At Wednesday’s committee, Senior Vice President Brian Cantrell of the coal company Alliance Resource Partners testified that fossil energy companies like his have been shunned by financial institutions.
He said financial institutions that have partnered with them for years are reducing the amount of capital available to the company or only allowing it to be used for non-fossil fuel activities.
“Their reasoning has nothing to do with our performance, instead it is do to discrimination against fossil fuels,” Cantrell said.
Kentucky Banking Association President Ballard Cassady opposed the bill, saying it would create a black list of financial institutions and dictate who financial companies can and can’t do business with.
“If enacted it will be a treatment that is more deadly than the disease,” Cassady said.
One Democrat joined Republicans on the committee voting in favor of the measure: Sen. Robin Webb, a Democrat from Grayson, lawyer and former coal miner.
“We’re facing activism infiltration where the minority is making decisions for the corporate entities,” Webb said.