- BlackRock appointed Aramco CEO Amin Nasser to its board of directors on Monday.
- Nasser leads the world’s largest oil producer, which is largely owned by the Saudi Arabian government.
- His appointment conflicts with Larry Fink’s support for ESG or “awakening” of investments.
BlackRock has drawn the ire of conservatives since it began supporting investing with environmental, social, and governance (ESG) factors, which has been rejected as “woke” by right-wing critics.
The decision to appoint Aramco CEO Amin Nasser to the board on Monday provides further ammunition for these critics and signals that the company may not be as socially conscious as it claims.
“Amin Nasser may be a nice person. But he symbolically and concretely represents Aramco. The wrong player here, if [BlackRock CEO] Larry Fink wants to really blur his image on the ESG front,” said Yale professor and management expert Jeffrey Sonnenfeld on CNBC on Tuesday.
Nasser leads the world’s largest oil producer, which is owned by the Gulf kingdom of Saudi Arabia, a state that has committed clear human rights violations and approved the killing of Washington Post journalist Jamal Khashoggi, according to an intelligence report by the Biden administration, in 2018.
BlackRock said in a press release that it will provide a “unique perspective” for a company that has made environmental sustainability a core business priority.
Fink drew mainstream attention to the embrace of climate risk by proclaiming “climate risk is investment risk” in his annual open letter, drawing himself and BlackRock into the ESG embrace for the first time in 2020.
Given Nasser’s presence on the board of a company that manages over $8 trillion in assets, it remains to be seen if he still stands behind that statement.
BlackRock has strongly advocated for ESG practices as an integral part of managing investment risks in a manner consistent with its fiduciary duty to prioritize the interests of its clients.
It has done everything to invest in the transition to cleaner energy. Last year, it acquired a Massachusetts-based renewable natural gas company from its funds and hired a former top McKinsey sustainability executive to lead its efforts in investing in the low-carbon economy.
While BlackRock’s Monday press release stated that Nasser is driving change at Aramco, his board appointment complicates this picture.
Saudi Arabia launched a $1.5 billion energy transition fund late last year, but at the outset of this initiative, Nasser referred to the drive to wean the world off fossil fuels as “flawed.”
“What we need is an optimal, realistic transition plan,” he said. “We need to understand that today alternatives are not ready to bear the heavy burden of increasing energy demand, and therefore we need to work in parallel until the alternatives are ready.”
Republican politicians have criticized Fink for embracing ESG in recent years, accusing BlackRock of practicing what they see as a liberal investment agenda – disregarding the firm’s significant holdings in major oil producers.
Fink reaffirmed BlackRock’s decarbonization efforts last month – but admitted that he stopped using the term “ESG” as critics argued it had been weaponized.
Now, conservatives may have another stick to beat him with.