New York City Pension Fund Urges Against BlackRock Director Amid Conflict of Interest

The New York City Employees’ Retirement Fund urged BlackRock shareholders to vote against the selection of Saudi Aramco’s CEO as director of BlackRock Asset Management, citing a potential conflict of interest over a divestment strategy. the company’s carbon footprint as well as human rights concerns.

BlackRock, the world’s largest asset management company, appointed Amin Nasser, the chairman of Saudi Aramco, the world’s largest oil company, as its independent director last year.

BlackRock shareholders should vote against Nasser’s election at the company’s annual meeting on May 15, New York City Administrator Brad Lander wrote in a filing with the Securities and Exchange Commission on behalf of the New York City Employees Retirement System.

“We believe this conflict of interest compromises Al-Nasser’s ability to provide an independent perspective, generally, and specifically regarding BlackRock’s decarbonization strategy,” he wrote.

BlackRock manages about $19 billion for the New York City Employees Retirement System, which invested $43 million in the asset management company.

BlackRock said in a statement sent by one of its representatives that Al-Nasser was “clearly independent” under New York Stock Exchange listing standards.

The statement said, “As Chairman of a large, publicly listed energy company in the strategically important Middle East region, Al-Nasser brings extensive knowledge and insight to the Board of Directors into the company’s operations, risk management, and energy transfer, too. as his perspective on international business strategy.”

Aramco has yet to comment.

BlackRock is working to strengthen its relationship with Saudi Arabia. On Tuesday, it said it would launch a new investment platform, backed by up to $5 billion from the Saudi Public Investment Fund, the kingdom’s sovereign wealth fund.

BlackRock currently has a relatively large board of directors of 16 people up for election at the shareholder meeting scheduled for May 15. The company has had questions about the size of its board in the past, but its directors easily won a new round last year.

This year, Institutional Shareholder Services and Glass Lewis, two senior advisers to the group, recommended voting “for” all BlackRock nominees, although they advised investors to vote “against” the payment. CEO Larry Fink due to operational and performance concerns.

BlackRock has come under fire from Republican politicians for its concerns about climate change, although it still invests in fossil fuel companies. When Nasser was appointed to the company’s board of directors for the first time last year, he believed that this was to reduce Republican criticism.

“Al-Nasser and BlackRock have different interests regarding the need for decarbonization,” the New York Pension Fund said on Wednesday.

He said, “Al-Nasser is very interested in expanding the use of fossil fuels and is an open advocate for that,” which is at odds with BlackRock’s commitment to reducing greenhouse gas emissions.

In a filing Wednesday, the New York City Employees Pension Fund said Al-Nasser cannot be considered truly independent of BlackRock with the 2022 gas pipeline deal that includes the asset management company and Aramco, as well as the issuance of 2023 bonds related to. this business.

The publication also raised human rights concerns, saying that oil giant Saudi Aramco is “engaged in one of the largest alleged violations of international climate-related human rights,” which could harm the reputation of BlackRock and its shareholders.

The publication was based on a letter sent by experts from the United Nations last year to Aramco in which they said that the expansion of fossil fuel production and its ongoing research threatens human rights.

“Given these factors, Al-Nasser’s continued presence on BlackRock’s board of directors poses a threat to the reputation and culture of the company, as well as the board and shareholders,” the release said.