Did you know that Brussels has advised Blackrock on sustainable finance?
The European Ombudsman beats the EU Commission for giving advice to the American group Blackrock on sustainable finance without having thoroughly verified the potential conflict of interest. All the details
The European Ombudsman beats the EU Commission for giving advice to the American group Blackrock on sustainable finance without having thoroughly verified the potential conflict of interest.
Here are all the details.
The European Ombusdman has decreed that the European Commission has not sufficiently examined the question of possible conflicts of interest of the US asset management giant, Blackrock, in carrying out this task.
This conclusion was reached by Emily O'Reilly, representative of the European Ombudsman, following the appeal lodged in May by 80 European parliamentarians after the Commission led by Ursula Von der Leyen had entrusted the US asset management company with a consultancy contract from 280 thousand euros for the integration of sustainability issues in banking regulations, Il Sole 24 Ore stressed.
"The demand for a company to conduct a study to the guidelines that will regulate food business interests of the company itself should have led to a much more critical review by the Commission," he said the Ombudsman, stating "You should have ask questions about the motivation, the pricing strategy and whether the internal measures taken by the company to prevent conflicts of interest were adequate ".
In any case, the Ombudsman points the finger at the current EU rules on public procurement and believes that, although the Commission in the specific case could have been more prudent, it cannot be accused of "maladministration". According to the Ombudsman, the problem arose from the fact that the applicable rules were not sufficiently solid and clear to allow officials to identify conflicts of interest except in a very narrow range of professional conflicts.
American asset management group Blackrock manages $ 7 trillion and has stakes in the fossil fuel sector for nearly $ 90 billion. There is practically no board of directors of a large oil company that does not have a representative. The main holdings include, for example, 4.8% of Chevron and ConocoPhilips, 4.5% of Exxon Mobil and 5% of Petrobras . As recently reconstructed by the British newspaper The Guardian, the group indirectly controls over 3 billion barrels of crude oil, 1300 tons of coal and 622 billion cubic meters of gas.
The US giant Blackrock, which has assets under management of over 7 trillion dollars and sits on the boards of all the largest companies in the world, last year voted in favor of pro-environment corporate resolutions in just 6% of cases. Even less than that already miserable 8% that had characterized the previous year, Il Fatto Quotidiano recently pointed out : “The meager balance sheet was announced by Proxy Insight, a company that monitors the resolutions and votes of companies. In most cases, these were resolutions in which shareholders asked companies to provide more information on the level of their emissions or to develop green conversion strategies ”. As the Financial Times recently pointed out, Blackrock's attitude contrasts with that of other heavyweight shareholders such as Jp Morgan (rising from 10 to 38% of votes in favor) or Welligton (from 8 to 42%) who instead increased their support in favor of pro-environment votes.
"The Commission – writes O'Reilly in the provision – should have been more rigorous by verifying, according to the rules, that the company (Blackrock, ed ) was not subject to a conflict of interest, which could negatively affect its ability to execute the contract" . A strong stance that the Ombudsman (this means Ombudsman) explains in this way: it was found that "the company's offer has raised concerns, since it has a financial interest in the sector" since it is the largest asset manager in the world . "Furthermore – adds O'Reilly – the low price of the company's offer could be perceived as part of a strategy to obtain information and influence the regulatory environment in this sector". Mary O'Reilly is therefore very explicit with the EU Commission and hopes that the procedures for awarding these posts will be changed as soon as possible.
What happens now? Does the assignment fail? Apparently not, Il Sole 24 Ore stressed: “Ombudsman O'Reilly's powers are not binding. At the same time, however, the Von der Leyen Commission will not be able to ignore it, as explained by Kenneth Haar, researcher at the Corporate Europe Observatory, a non-profit organization that monitors and documents lobbying activities in the European Union: "The Ombudsman has no power to cancel the contract, but the institution has moral power. In this case the decision reinforces the denunciation of the 80 European parliamentarians ”. And he adds: “It is difficult to imagine that the Commission could completely ignore this decision. The Commission will come under increased pressure to ensure serious and balanced preparations for upcoming EU initiatives on banking regulation and climate change. It remains to be seen whether this will lead them to give up Blackrock or if they will look for another path »”.
What is Blackrock's position on the whole story? «The Blackrock Financial Markets Advisory (FMA) division tries to provide the highest quality and the best value service to all its clients around the world – the US group said, as reported by Il Sole 24 Ore -. The European Commission has already publicly declared that the technical quality of the FMA proposal was the basis of their decision in assigning the mandate. The FMA has adopted a broad and inclusive approach, which includes academia, civil society, banks, supervisory authorities and market operators, and looks forward to completing its work and delivering its final report to the Commission ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/lo-sapete-che-bruxelles-ha-dato-una-consulenza-a-blackrock-sulla-finanza-sostenibile/ on Thu, 26 Nov 2020 06:32:52 +0000.