BlackRock is about as far from Green as you can get – just look at the name and who they are.
It is one of the world’s largest asset managers and financial service providers who has always in vested heavily in whatever makes a buck, including fossil fuels – mining, refiners, distributers, energy production, and transport… you name it, they have it… USD1,8 trillion of investments in the black and oily stuff…
They have a huge advisory arm too with sophisticated software that helps fund managers make investment decisions.
They are so big that they even help the US Federal government run their emergency funding policies. In March, they received a huge advisory assignment to run investment vehicles the Federal Reserve to buy corporate bonds and mortgage-backed securities from the primary and secondary markets.
Up until recently Climate Change has not been relevant for BlackRock until their recent January 2020 announcement that they are now turning “Green” – that was met with unbelieving disbelief by the world! The announcement did not explain exactly how and when because the shares of the Seven Sisters and major bank holdings appear to be excluded from this new corporate policy. The banks are the world’s biggest financiers of fossil fuel companies and projects…
But things got normalized Mr. Fink, their CEO, announced in January that, “Natural gas plays a very large role in the energy transition.” Since science shows that fracking for natural gas releases large amounts of methane, the second-most significant contributor to climate change, it became quite clear that he has not really become Green.
But proving you are Green can be done in other ways without big announcements that are half-truths.
The EU has just commissioned a BlackRock company to advise them on how to integrate sustainability into banking regulation. There can be no doubt that this announcement also received with unbelieving disbelief by the world! It is a blatant effort by BlackRock to burnish its “Newly-Created-Climate-Change-Credentials”…
… the media attention was also beyond belief because it was recorded like their January announcement in every newspaper around the world.
This is a massive assignment involving thousands of pages of scientific and legal documents and thousands of man-hours dealing with regulations affecting the world’s biggest banks and financial service companies. BlackRock appears to have undercut the competition by quoting a price of some €280 000 which is the 6 month salary of a single middle manager and a small fraction of Mr. Fink’s salary ink (c. USD24 million 2018). It is impossible to imagine that this assignment can involve a small team of experts for a few months work.
The EU should be strongly critized for accepting such a partner because of the following reasons:
- The company is not a Green specialist in terms of activities or expertise, although they are in a position to buy such expertise. One must recall that they have one of the world’s biggest portfolios of fossil fuel shares.
- They are advisors to investors, banks and financial service companies and should have been excluded from bidding because of conflicts of interest. The banking, investment and financial service lobbies are the most powerful in the world and have vested interests to keep regulation to the bear minimum.
- Their winning price clearly bears no relation to the scope of the work and is nothing more than a media coup for BlackStone. The EU should know better than undermine their own credibility.
- There are many excellent and independent European advisors who could accomplish this assignment.
The Nordic governments should seek to overturn this procurement decision because it is clearly not in the best interests of the European community.
Photo: Wikipedia Commons: Deepsea Delta Olieplatform i Nordsøen Photo: User:Erik Christensen