BlackRock’s decision to appoint a former oil executive to its board has drawn criticism, given its apparent focus on ESG standards. Amin Nasser, former head of Saudi Aramco, one of the world’s largest oil companies, joins BlackRock as an independent director. The appointment and criticism come at a sensitive time as BlackRock awaits a decision from regulators on its Bitcoin ETF application.
Asset manager BlackRock’s decision to add a former oil executive to its board has drawn widespread criticism in the global media. Much of this plays into the asset manager’s supposed emphasis on environmental, social, and governance (ESG) standards.
On Monday, BlackRock announced that it had appointed Amin Nasser as an independent director, effective immediately. BlackRock announced the move in recognition of the role of the Middle East in its long-term strategy.
Many experts and publications are wondering how socially conscious BlackRock can justify its decision.
Nasser Has Developed His Career in The Oil Industry
Nasser joins the company from Saudi Aramco. The world’s largest oil company, with a market capitalization of $2.084 trillion. The 65-year-old Saudi national will start his first job in finance after a long career solely in the oil sector.
Saudi Aramco is estimated to be the world’s largest single emitter of greenhouse gases, responsible for more than 4% of the world’s greenhouse gas emissions since 1965.
UNCS News tweeted on July 20 that “BlackRock, the leading global asset manager, has named Amin Nasser, the CEO of Saudi Aramco, as an independent director. BlackRock plans to invest in #FossilFuel companies while simultaneously urging them to embrace energy transition strategies.”
The company is also wholly state-owned by the Saudi national government, one of the most oppressive regimes in the world. The firm is a critical national asset for the Kingdom. Saudi Arabia uses Aramco’s oil wealth to influence the global stage.
“Dramatic Change” Spotlighted in BlackRock Corporate Philosophy
Last year, the company posted record profits of $161.1 billion. Figures that were boosted by the increase in world energy prices.
BlackRock CEO Larry Fink highlighted Nasser’s “leadership experience, understanding of the global energy industry, and the drivers of shifting toward a low-carbon economy.”
Some see the appointment as a dramatic change in BlackRock’s corporate philosophy. Prior to this week, Larry Fink and his colleagues were at the forefront of global companies adopting ESG standards.
As Western politics has become increasingly focused on social issues, top management has, in turn, become a bigger fan of “stakeholder capitalism,” a type of capitalism that looks beyond the boardroom and the bottom line by assessing its global impact. However, critics say it’s another way companies have become subservient to social justice activists.
BlackRock Gets Defensive
Jeff Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management, told CNBC on Tuesday that Nasser’s appointment would “erase” BlackRock’s image at ESG. Such feelings are widespread.
Ulf Erlandsson, executive director of the Anthropocene Fixed Income Institute, told Bloomberg that the appointment “raises an interesting question.”
BlackRock’s latest hiring may be a defensive move to convince conservatives that the world’s largest asset manager hasn’t “woken up.”
Soon after he turned over the paperwork to the SEC, other companies followed suit, including Invesco, Wisdom Tree, Bitwise, and Fidelity. Their app is currently under review, with much of the crypto industry and the world watching.
By Audy Castaneda
