From ... in Environmental — Jul 18, 2023

ESG Pioneer Blackrock Names CEO of World's Largest Oil Company to Its Board

Asset management giant BlackRock announced on Monday that it had named the CEO of Saudi Aramco, the world’s largest oil company, to its board of directors.

The CEO of Blackrock, Larry Fink, praised his Aramco counterpart Amin Nasser for his “understanding” of the “shift towards a low carbon economy” and “unique perspective” on issues of importance to the corporation in a statement on Monday, according to CNBC.

The choice of elevating the head of a fossil fuel giant with profits larger than corporations such as Apple and Facebook to the board of the company appeared to defy BlackRock’s reputation as one of the world’s most aggressive proponents of “Environmental, Social, and Governance” (ESG) standards for corporations – political goals meant to advance goals surrounding climate change, racism, and other left-wing political topics of interest. It also follows a similarly curious decision on behalf of the United Nations, which regularly champions climate alarmism, to grant leadership of its COP28 climate conference to Sultan al-Jaber, the CEO of the Abu Dhabi National Oil Co. – the United Arab Emirates (UAE) state oil company. In his announcement on Monday, Fink emphasized that Nasser, the Aramco CEO, would fit in well with BlackRock’s corporate values. “Amin’s distinguished career at Aramco, spanning more than four decades, gives him a unique perspective on many of the key issues facing our firm and our clients,” CNBC quoted Fink as saying. “His leadership experience, understanding of the global energy industry and the drivers of the shift towards a low carbon economy, as well as his knowledge of the Middle East region, will all contribute meaningfully to the BlackRock Board dialogue.” Fink has for years suggested using BlackRock’s influence to further left-wing ESG goals. “Behaviors are going to have to change. This is one thing we’re asking companies. You have to force behaviors. At BlackRock we are forcing behaviors,” he notoriously stated during a 2017 conference. BlackRock announced in Fink’s annual letter to corporate executives in 2020 that it would begin considering “climate change” as a critical factor in assessing the health of corporations and where to invest its assets. Fink promised BlackRock would begin, according to Fortune, “exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening the firm’s commitment to sustainability and transparency in its investment stewardship activities.” “I believe we are on the edge of a fundamental reshaping of finance,” Fink wrote. BlackRock’s forceful push for ESG policies — including both environmental policies and those outside of the climate realm, such as alleged anti-racism actions — has prompted significant backlash in the United States. In May, 17 state attorneys general filed a motion against BlackRock with the Federal Energy Regulatory Commission (FERC) on the grounds that the asset manager was using its economic leverage to force policy changes in companies it did not own. “Maybe BlackRock was a passive investor 10 years ago, but today it’s an environmental activist. Indeed, BlackRock’s own public commitments belie its representations to the commission,” the motion read. “Pursuant to its membership in several horizontal associations, BlackRock aims to pressure or force utility companies to phase out traditional energy investment.” Fink began disavowing the term “ESG” in June, lamenting the term had been “misused.” The 2017 remarks about “forcing behaviors” began circulating on the internet again in June, prompting BlackRock to defend itself. In a statement to Breitbart News, a company spokesperson said, “This nearly six-year-old clip misconstruing Larry’s words about BlackRock’s own approach to its employees has been circulating for years on social media and is often taken out of context.” The blowback for BlackRock has largely been limited to the United States. In Saudi Arabia, the government regularly touts the creation of “sustainable” policies, insisting the world is wrongly trying to “crucify” the Saudi royal family while they nobly attempt to diversify away from fossil fuels. Aramco openly embraces ESG on its website. “The Company has implemented an internal governance model that integrates sustainability principles into business strategy, streamlines decision making, and provides internal clarity with regard to roles and responsibilities,” Aramco claims. “Sustainability factors have become increasingly critical for Aramco, as it aims to balance profitability, environmental protection, and the growth and prosperity of the communities in which it operates.” Aramco is Saudi Arabia’s state oil company and the top driver of its economy. It posted $48.4 billion in profits in the second quarter of 2022 – more than Apple, the Google parent company Alphabet, and Facebook combined – and ultimately reported $161 billion in profits for 2022.

The Saudi oil corporation’s public commitment to ESG has been profitable. As Bloomberg revealed last week, Aramco acted in the face of the global push to abandon fossil fuels by creating subsidiaries and working with BlackRock to exploit ESG loopholes and rake in investments. “The unlikely tie-up between Aramco and ESG began with the creation of two subsidiaries — the Aramco Oil Pipelines Company and the Aramco Gas Pipelines Company. Aramco sold 49% of the shares in each unit to consortiums led by EIG Global Energy Partners LLC and BlackRock Inc., respectively,” Bloomberg explained: These investors used bridge loans from banks to fund those transactions. In order to generate cash to repay the bank loans, the EIG and BlackRock consortiums created two special purpose vehicles: EIG Pearl Holdings and GreenSaif Pipelines Bidco, both registered at the same Luxembourg address.

These SPVs then sold bonds, which, since they had no direct links to the fossil-fuel industry, ended up getting an above-average score in a widely-used JPMorgan Chase & Co. sustainability screening based on third-party ESG scores. “We will champion an inclusive agenda that ramps up action on mitigation, encourages a just energy transition that leaves no one behind, ensures substantial, affordable climate finance is directed to the most vulnerable,” al-Jaber promised, “accelerates funding for adaptation and builds out a robust funding facility to address loss and damage.” The U.K. Guardian revealed in June that the United Nations had given the Abu Dhabi National Oil Company access to the COP28 email system, used by climate activists in the U.N. whose interests are diametrically opposed to those of the fossil fuel industry. Follow Frances Martel on Facebook and Twitter.

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ESG Pioneer Blackrock Names CEO of World's Largest Oil Company to Its Board

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