Kentucky AG Legal Opinion: ESG Investing is a Breach of an Asset Manager’s Fiduciary Duty


Steve Milloy

Bottomline commonsense: “While asset owners may pursue a social purpose or “sacrifice some performance on their investments to achieve an ESG goal,”25 investment managers entrusted to make financial investments for Kentucky’s public pension systems must be single-minded in their motivation and actions and their decisions must be “[s]olely in the interest of the members and beneficiaries [and for] the exclusive purpose of providing benefits[26] to members and beneficiaries.” Read the entire letter.

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May 26, 2022 10:24 pm


These asset managers, who are so violating their fiduciary duties need to be sued into oblivion. Like Blackrock’s ironically named Larry Fink.
Take the recent Engine 1 attack on Exxon’s board. E1 owned almost no XOM stock, yet with the help of the likes of Blackrock, they got, what, two rogue members elected to Exxon’s Board? Where they are now damaging XOM’s stock value with politically driven positions.

Reply to  Rod
May 26, 2022 10:29 pm

And don’t buy the line that XOM is up. Yes, but it may have been up much more – just compare it to COP or CVX. I’m pissed…I own XOM and feel defrauded.

Ron Long
Reply to  Rod
May 27, 2022 3:01 am

Rod, maybe look into Minority Shareholder Legal Rights?

Reply to  Rod
May 27, 2022 2:59 am

Agree. ESG is a cancer.

Trying to Play Nice
Reply to  Rod
May 27, 2022 5:17 am

The aptly named, Larry Fink.

Matthew Sykes
May 27, 2022 12:15 am


Steve Case
May 27, 2022 1:30 am

After a short search Google finds this:

The Attorney General of Kentucky is elected for a four-year term in the same year other statewide officers are elected, rather than being appointed as in some states such as Alaska. A 1992 amendment to the Kentucky Constitution permits the Attorney General of Kentucky to serve two consecutive terms.

Here’s Wikipedia on Kentucky Attorney General Election

Ron Long
May 27, 2022 2:59 am

Refreshing to see the law being followed instead of catering to nut-jobs. The fiduciary responsibility of persons with their hands on investment money is usually spelled out in writing.

John Garrett
May 27, 2022 3:53 am

Very interesting.

The thought of Larry Fink and Jeremy Grantham and the rest of the ESG charlatans facing hard time warms the cockles of my heart.

May 27, 2022 5:16 am

Cool! Let the lawsuits commence!

Coeur de Lion
May 27, 2022 5:21 am

Reminds me of the Synod of the Church of England planning to disinvest their pension fund for threadbare impoverished priests from lucrative fossil fuel companies unless they followed the Paris Agreement. But there is no guidance for ffc’s in the PA

Eric Harpham
Reply to  Coeur de Lion
May 27, 2022 6:15 am

ffc’s in the PA? please elaborate what this means.

Reply to  Eric Harpham
May 27, 2022 8:52 am

fossil fuel companies in the Paris Agreement? Just guessing.

Tom Halla
May 27, 2022 6:44 am

ESG results would be nearly impossible to fairly and objectively judge, while return on investment is measurable. Allowing managers to be judged by intangibles is folly.

Reply to  Tom Halla
May 27, 2022 9:19 am

Folly is the new normal. success!

May 27, 2022 6:53 am

Good heavens! A sane judge….in this day and age?

James H
Reply to  Kip Hansen
May 27, 2022 3:52 pm

Attorney General, not judge. I guess this is a warning shot.

Reply to  James H
May 28, 2022 7:49 am

James ==> Quite right….however, overall, AGs then to be conspiratorial, banding together secretly to coerce money from oil companies through a secret coordinated series of law suits.

May 27, 2022 8:54 am

We need many more AGs to think through this assault on fiduciary duty, freedom, and common sense.

May 27, 2022 9:18 am
Reply to  ResourceGuy
May 27, 2022 10:11 am

Are thingsin flux, especially since ‘Captain Kirk’ blew the whistle on HSBC?

This may also be of interest:

Vanguard refuses to end new fossil fuel investmentsWorld’s second-largest asset manager cites its duty to maximise returns for clients

 MAY 25 2022

Reply to  Sommer
May 28, 2022 5:38 am

I believe Vanguard backed the Engine 1 anti-hydrocarbon directors in last year’s XOM proxy battle. Sounds ESG to me.

Gary Pearse
May 27, 2022 11:13 am

States are going to have to pass specific legislation about protecting the economy and well-being of their state and it’s people. The dark side has readily available environmental legislation that they are able to totally corrupt and do what they (global agents) want.Texas passed a law that decertified financial entities from engaging in business that discriminates against the O&G industry re financing. BlackRock got “memo” and had to backtrack fast!

May 27, 2022 9:53 pm

The same warning was given to Australian Super funds you can’t use ethical investing as an excuse for making bad decisions and losing investor funds.

Richard from Brooklyn (South)
Reply to  LdB
May 29, 2022 3:18 pm

This has been law for many years ibn the common law legal environment. The Scargill case Cowan v Scargill [1985] Ch 270 held that a direction on trustees of the Mine Workers Union pension fund (UK) to not invest in competitors to coal was a breach of the clear fiduciary duty to invest solely to get the best returns for members.
As a pension fund trustee myself (and a lawyer) I remind our fund managers of this when they try to peddle their ‘ethical investment’ options. The only response I get is vague statements that ethical investment gives as good or better returns than traditional investments.
My fellow trustees are of a like mind to me and we continue to get the best available returns for members and pensioners.

May 28, 2022 6:40 am

About time !!!
I don’t know why shareholders haven’t been suing companies/boards for all of the woke nonsense that reduces their dividends and such.

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