Treasurer Ball Leads Kentucky Constitutional Officers in Letter to S&P Objecting ESG’s Inclusion in State Credit Ratings

FRANKFORT, Ky. (June 29, 2022) – Kentucky State Treasurer Allison Ball led an effort of the state’s Constitutional Officers to push back against S&P Global Ratings' inclusion of environmental, social, and governance factors in credit ratings for states and state subdivisions. Secretary of State Michael G. Adams, Attorney General Daniel Cameron, Auditor Mike Harmon, and Commissioner of Agriculture Ryan Quarles joined the letter with Treasurer Ball.

“State credit ratings should only be based on finances; they should not be tools to advance political agendas,” Treasurer Ball said. “Injecting political factors of this kind into credit assessments could be particularly detrimental to Kentucky and its signature fossil fuel industries.”

ESG investing is a philosophical approach that considers environmental, social, and governance practices as a strategy rather than focusing solely on financial returns. The letter is a response to S&P’s report, “S&P Global Ratings, Through the ESG Lens 3.0: The Intersection of ESG Credit Factors and U.S. Public Finance Credit Factors” and objects to the consideration of ESG factors by S&P.

The letter states in part: “The core purpose of S&P is to provide objective insights into the financial competencies of each state. However, this new plan looks more like China’s social credit system and purposefully muddies the waters between objective financial concerns and normative political issues. It creates a dangerous framework for state borrowing mechanisms, whereby state creditworthiness will fluctuate wildly based on ever-changing political tides.”

The full letter can be accessed here.