Concerns About Conflicts of Interest as EU Hires BlackRock to Create G …

In a move described as “letting the fox guard the henhouse”, BlackRock, a massive global investor in banks and fossil fuel companies, has been hired by the EU to develop new environmental regulations for banks. 

BlackRock competed with eight other bidders for the contract that will allow them to propose new environmental rules while considering how the EU can integrate “environmental, social, and governance (ESG) factors” into its supervision of banks. 

Campaigners are concerned about the potential for conflicts of interest emerging during the contract. As the world’s largest investment manager, BlackRock has about $7.43 trillion in assets in the world’s largest companies. 

Among global investors, BlackRock is at the top of the leaderboards: they are a top-three investor in all eight of the globe’s largest oil companies and a top-ten investor in each of the world’s twelve most important banks. 

According to Katrin Ganswindt, a campaigner at Urgewald, a human rights and climate justice organization: “Appointing BlackRock as advisor to the European Commission on environmental, social and governance factors seems a bit like letting the fox guard the henhouse. On top of being the world’s largest investor in fossil fuels, they are also among the leading global financiers of the weapons industry.”

Although the commission will only grant BlackRock €550,000 for its work – 2% of the CEO’s annual pay – the decisions that the investor could make have the potential to be beneficial for the company. If BlackRock were to propose fewer restrictions on oil companies in spite of the eminent climate crisis, they could see massive profits. 

While BlackRock has made recent progress on issues of environmental sustainability, recently pledging to divest from firms making more than 25% of their revenue from coal, campaigners are still concerned about the contract because of the company’s record of obstructing environmental justice. 

According to a spokesman for the European Commission, the BlackRock contract was granted “in full and strict compliance with the applicable EU procurement rules, including those on the eligibility of tenderers and the prevention of any potential conflict of interest”.

BlackRock’s proposed regulations are suggestions, not law – and they will only form one part of the EU’s final policy decisions, added the spokesman. 

Source: The Guardian

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