Dive Brief:
- The New York City Comptroller’s Office urged BlackRock shareholders to oppose the re-appointment of Saudi Aramco’s CEO Amin Nasser to the asset manager’s independent board of directors.
- NYC Comptroller Brad Lander said in a filing to the Securities and Exchange Commission Wednesday that Nasser’s ties to Aramco will compromise his ability to provide independent oversight. Lander said he was “particularly” concerned with Nasser’s impartiality in regards to oversight of BlackRock’s decarbonization strategy.
- “In our view, Nasser is not qualified to serve as an independent member of BlackRock's Board, which is responsible for ‘[o]versight of near- and long-term business strategy (including sustainability),’” Lander said in the filing.
Dive Insight:
Nasser was nominated to join BlackRock’s board in July last year after former member Bader Alsaad — chair and director general of the Arab Fund for Economic and Social Development — told the firm he would not seek re-election, according to a BlackRock SEC filing. The nomination was opposed by the NYC comptroller back then as well.
BlackRock’s board of directors includes 14 independent members, as well as Larry Fink, the firm’s chair and CEO, and BlackRock President Robert Kapito. Lander sent the May 1 exempt solicitation to shareholders on behalf of the New York City Employees’ Retirement System, which has approximately $43 million invested in BlackRock, according to the filing. The nation’s largest asset manager also manages approximately $19 million for NYCERS.
Lander said in the filing that Nasser’s nomination “represents a step backward for the company.” The NYC comptroller pointed to comments Nasser made at S&P Global’s CERAWeek energy conference in March, when the Aramco CEO said, “We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions, as long as essential," according to Reuters.
“Nasser has a vested interest in — and is an outspoken vocal advocate for — the expansion of fossil fuels,” Lander wrote. “Such positions directly conflict with BlackRock's publicly stated commitment to ‘supporting the goal of net zero greenhouse gas emissions by 2050 or sooner.’”
Lander also questioned the oil executive’s independence, given a 2022 transaction where a group co-led by BlackRock purchased a 49% equity stake in Aramco for $15.5 billion. Fink called it a “landmark transaction that will deepen [BlackRock’s] partnership with Aramco” and raised the specter of “possible future collaborations” in a press release at the time.
“Given the significant related-party transactions between Aramco and BlackRock, and the potential for ‘possible future collaborations,’ we do not believe Nasser can be genuinely independent of BlackRock,” Lander wrote.
BlackRock said in its proxy materials that Nasser’s experience as Aramco’s CEO gives the board access to his “extensive expertise and insight into corporate operations, risk management and the energy transition, as well as an experienced outlook on international business strategy.”
Lander said the timing of Nasser’s nomination “is also concerning,” as “it coincided with a period of significant political pressure challenging BlackRock’s commitments to address climate-related financial risks.”
BlackRock has become a consistent target of the anti-ESG movement and found itself on the receiving end of multiple subpoenas or legal action from state and congressional Republican officials. In its 2023 annual SEC filing, BlackRock said mounting ESG scrutiny, including domestic and international ESG regulation and laws that block the firm from working with the state over its fossil fuel stances, could “adversely impact” the company’s reputation and revenue.
Eleven days before Nasser was appointed to the board last year, 15 Republican state attorneys general subpoenaed the firm about its ESG practices, and name-dropped its participation in the Climate Action 100+ alliance. BlackRock revised its membership strategy in the coalition this February, transferring its membership to an international arm as JPMorgan Chase and State Street exited.
BlackRock will hold its annual board meeting May 15 at 8 a.m. EST. Given that Nasser joined the board after the 2023 board meeting, this will represent shareholders’ first chance to weigh in on his candidacy.
