Title	Key Dates	Nature of Action	ESG Category	Summary
Treasurer's Op-Ed on ESG Investment	Adopted and in effect 4/21/2023	Treasurer Position	Restrict Use of ESG Factors; Focus on Pecuniary Characteristics	■State Treasurer Allison Ball wrote an opinion emphasizing that "ESG 'sustainable investments' is not a good strategy and has no place in Kentucky pensions," mentioning asset managers like BlackRock.
Treasurer's Op-Ed on ESG Investment	Adopted and in effect 4/21/2023	Treasurer Position	Target Entities that Boycott Certain Industries
HB236: An Act relating to the fiduciary duties owed to the state-administered retirement systems	Effective date 3/24/2023 Adopted 3/13/2023 Introduced 2/9/2023	Legislation	Restrict Use of ESG Factors; Focus on Pecuniary Characteristics	■Amends existing Kentucky statute to require fiduciaries of state-administered retirement systems to consider the sole interest of the members and beneficiaries of the retirement systems using only pecuniary factors and to prohibit the consideration of or actions on nonpecuniary interests, including environmental, social, political, and ideological interests. ■Requires the board of trustees of state-administered retirement systems to adopt written proxy voting guidelines consistent with the fiduciary duties or the proxy voting guidelines of a sole investment manager under contract with the board to act as a fiduciary in compliance with the duties and other requirements of this Act. Requires the board to vote shares accordingly.
Attorney General: ESG Hurts Kentucky’s Economy and Our Teachers, Firefighters, and Police Officers	Adopted and in effect 12/8/2022	Attorney General Position	Restrict Use of ESG Factors; Focus on Pecuniary Characteristics	■Op-ed claims that ESG investing hurts the state's economy and the pension plans of its teachers, firefighters, and police officers. Emphasizing Kentucky's role as the seventh-largest coal-producing state in America, its attorney general claims that "for the foreseeable future, renewable energy cannot compete with the affordability and reliability of our fossil fuels" . . . and that the "fundamental goal of the ESG movement is the destruction of fossil fuel industries."
Treasurer Ball, Attorney General Cameron Request Information on Role of ESG-Investment Practices in Kentucky’s Public Retirement Systems	Adopted and in effect 10/31/2022	Enforcement / Divestment	Restrict Use of ESG Factors; Focus on Pecuniary Characteristics	■State Treasurer and Attorney General sent a letter to the executive directors of the Kentucky Teachers’ Retirement System and the Kentucky Public Pension Authority requesting information about the systems’ efforts to ensure ESG factors are not being implemented in their investment decisions, consistent with Kentucky law, since ESG investment practices "violate statutory and contractual fiduciary duties," as per AG Opinion 22-05. SUBSEQUENT DEVELOPMENTS On December 5, 2022, the County Employees' Retirement System (CERS) and the Kentucky Retirement System (KRS) approved letters in response by referring to their investment policy statements. The CERS and KRS boards said they consider ESG factors in certain circumstances. The CERS CEO stated that consideration of ESG factors "must always be done with an eye toward the unwavering fiduciary duty owed to every member of [CERS]." Additionally, the CERS CEO noted that the board at its Nov. 10, 2021 meeting amended its investment policy by noting "the CERS Trustees recognize the importance of responsible investing . . . and acknowledge that integrating ESG policy principles . . . will enhance investment results."
AG Opinion 22-05: ESG Investment Practices of Public Pension Funds	Adopted and in effect 5/26/2022	Attorney General Position	Restrict Use of ESG Factors; Focus on Pecuniary Characteristics	■Announced that ESG investment practices are inconsistent with Kentucky law governing fiduciary duties owed by investment firms to public pension plans.
SB205: An Act Relating to State Dealings With Companies That Engage in Energy Company Boycotts	Adopted and in effect 4/8/2022	Legislation	Target Entities that Boycott Certain Industries	■Directs the State Treasury to publish annually a list of financial companies that engage in energy boycotts. If a listed financial company does not cure within 90 days of receiving notice, Kentucky governmental entities are required to divest all publicly traded securities of the financial company within one year. ■Divestment is not required from any indirect holdings in actively or passively managed investment funds or private equity funds. SUBSEQUENT DEVELOPMENTS The County Employees Retirement System (CERS) says it is unable to comply with a new Kentucky law requiring state agencies to disassociate with companies that boycott the energy sector because doing so would be “inconsistent with its fiduciary duties.” In the February 13, 2023 letter to Treasurer Ball, CERS board chair Betty Pendergrass wrote that “CERS has determined that the requirements set forth in [Kentucky Revised Statutes] 41.470 to KRS 41.476 are inconsistent with its fiduciary responsibilities with respect to the investment of CERS assets or other duties imposed by law relating to the investment of CERS assets, thus, per the law, it is not subject to the notification and other requirements set forth in KRS 41.470 to KRS 41.476.” Treasurer Ball releases restricted financial companies list on January 3, 2023 (as directed under SB205). ■ The 2023 list includes the following financial companies: BLACKROCK, INC, BNP PARIBAS SA, CITI GROUP INC, CLIMATE FIRST BANK, DANKSE BANK A/S, HSBC PLC, JPMORGAN CHASE & CO., NORDEA BANK ABP, SCHRODERS PLC, SVENSKA HANDELSBANKEN AB, and SWEDBANK AB.

Legislation/Guidance in Effect

Past/Inactive Legislation

Contacts