BlackRock, one of the world’s leading asset managers known for its emphasis on environment, social, and governance (ESG) standards, has recently come under fire for its decision to appoint Amin Nasser, a former oil executive, to its board. The move has been met with widespread criticism in the global media, raising questions about how a socially conscious firm can justify such a decision.
Nasser, a 65-year-old Saudi citizen, joins BlackRock from Saudi Aramco, the largest oil company in the world with a market capitalization of over $2 trillion. During his career in the oil sector, Saudi Aramco has been estimated to be the world’s largest single emitter of greenhouse gases, responsible for over 4% of global greenhouse emissions since 1965. Moreover, the company is fully state-owned by the Saudi national government, which is known for its oppressive regime and uses Aramco’s oil wealth to exert influence on the global stage.
BlackRock’s CEO, Larry Fink, defended Nasser’s appointment, citing his “leadership experience, understanding of the global energy industry, and the drivers of the shift towards a low-carbon economy.” However, many critics see this as a significant departure from BlackRock’s previous corporate philosophy, where the firm had been at the forefront of adopting ESG standards.
As businesses, particularly in the West, increasingly embrace “stakeholder capitalism,” which considers the broader societal impact of their actions, critics argue that this trend is driven by pressure from social justice activists. Nasser’s appointment has added fuel to this debate, with concerns that BlackRock’s image on ESG may be blurred.
The controversy over Nasser’s appointment comes at a sensitive time for BlackRock. Earlier this year, some US states, including Florida, announced their decision to withdraw state assets managed by BlackRock due to the asset manager’s green investment policies. Republican politicians accused the firm of being hostile to the fossil fuel industry.
The appointment also coincides with BlackRock’s bid for approval of the first United States Bitcoin ETF application, a process that is under unprecedented scrutiny. As the crypto industry and the world watch closely, BlackRock’s move to include a former oil executive on its board may be seen as a defensive tactic to assuage conservative critics who perceive the company as having embraced “woke” policies.
The controversy surrounding Nasser’s addition to the board raises important questions about the intersection of ESG standards, corporate decisions, and the balancing act that asset managers like BlackRock must navigate to maintain credibility and meet the demands of diverse stakeholders. The impact of this appointment may have far-reaching consequences for BlackRock’s standing in the industry and its ongoing engagement with ESG-related matters.