Other than ESG: the head of Saudi Aramco has joined the board of BlackRock
After years of insisting on the importance of ESGs, BlackRock now welcomes the head of Saudi Aramco, the largest oil company in the world, to its board of directors. Here because
BlackRock, the world's largest investment firm, has appointed Amin Nasser, the chief executive officer of Saudi Aramco, the world's largest oil company, to its board of directors. It is a curious move for BlackRock, which for some years has been paying close attention to climate risk and ESG, those factors that "measure" the environmental, social and governance sustainability of an investment.
THE SENSE OF BLACKROCK'S MOVE
The appointment of Nasser, at the helm of Aramco since 2015, perhaps signals BlackRock's willingness to reaffirm its support for the oil industry and ward off criticism from conservative circles, who accuse it of boycotting the oil & gas sector (in which, in fact, he continues to invest heavily). Chief Executive Larry Fink said Nasser's addition to the board will give BlackRock a "unique perspective" on some key issues for the firm and its clients.
LARRY FINK IS BETWEEN TWO FIREWORKS
BlackRock is between two fires. It is attacked, on the one hand, by US conservative circles hostile to ESG and to the so-called " woke capitalism" (i.e. activist and radical leftist, simplifying) who accuse it of boycotting the oil industry and giving more importance to generic guarantees of sustainability rather than the economic return on investment. But BlackRock is also criticized, on the other hand, by the progressive American world, which asks it to embrace climate action with greater conviction and ambition: BlackRock continues to invest in assets linked to fossil fuels, being a shareholder of large oil companies such as ExxonMobil , ConocoPhillips and even Saudi Aramco itself (with a stake worth $2.4 billion).
– Read also: Why is BlackRock's Fink now “ashamed” of ESGs?
NASSER, BLACKROCK AND THE ESGs
Sasja Beslik, chief investment officer at NextGen ESG, told Bloomberg that Nasser joining BlackRock's board "signals in part that we need oil and gas on the table if we are going to make this transition work." In parallel, though, the move “also protects BlackRock from vultures who question its public stance on ESG, which has never been strict in practice,” as seen.
According to Fink, Nasser has "leadership experience"; in addition, “his understanding of the global energy sector and the factors driving the transition to a low-carbon economy, as well as his knowledge of the Middle East region, will contribute significantly to the dialogue on the BlackRock board of directors”.
Nasser is also very critical of ESG. Last February, for example, he said that sustainability factors have "an automatic bias against all conventional energy projects," and that this bias will be the cause of underinvestment in hydrocarbons that is risky for energy security and the global economy.
It is possible that some of BlackRock's clients, those most attentive to climate sustainability, do not welcome the presence of Saudi Aramco on the board and review their investments. But the Saudi company is already receiving ESG investments – it is not clear whether intentionally – through a complicated chain of financial transactions that also involve BlackRock itself.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/blackrock-aramco-consiglio-amministrazione/ on Wed, 19 Jul 2023 07:39:32 +0000.