BlackRock Inc, the world’s largest asset manager, has appointed Amin Nasser, the chief executive officer of Saudi Aramco, to its board. The move highlights BlackRock’s commitment to the oil industry amid a highly politicized debate about its role in Environmental, Social, and Governance (ESG) investing.
Amin Nasser has been leading Saudi Aramco, the world’s biggest oil producer, since 2015, including overseeing its public listing. BlackRock’s CEO, Larry Fink, stated in an e-mail statement on Monday that Nasser’s addition to the board provides the company with “a unique perspective” on key issues and challenges faced by the asset manager and its clients.
BlackRock and Fink, who is 70 years old, have faced criticism from both sides of the political spectrum regarding ESG investing. Environmental advocates have accused the firm of continuing to invest heavily in the fossil fuel industry, while some Republicans have criticized BlackRock for promoting a “woke” agenda that they believe conflicts with American capitalism.
Sasja Beslik, chief investment officer at NextGen ESG in Japan, described the appointment as “a very cunning move.” He believes it signals the need for the oil and gas industry to be part of the transition to a low-carbon economy. However, it also protects BlackRock from scrutiny over its public ESG stance, which Beslik suggests was not as rigid as it seemed.
Nasser has at times expressed reservations about the ESG movement, warning in February that the focus on ESG metrics could undermine investments in oil and gas and threaten global energy security. He serves on several boards, including the Massachusetts Institute of Technology Presidential CEO Advisory Board and the JP Morgan International Council.
Larry Fink praised Nasser’s leadership experience, understanding of the global energy industry, and knowledge of the shift toward a low-carbon economy. He believes Nasser’s contributions will be valuable to the BlackRock board’s discussions.
Ulf Erlandsson, CEO of the Anthropocene Fixed Income Institute, raised the question of how clients who exclude Aramco from their investment portfolios might view its increased importance on BlackRock’s board. He warned of potential client uneasiness resulting from the move.
Bader al-Saad, director general and chairman of the Arab Fund for Economic and Social Development, will not stand for re-election to BlackRock’s board next year, according to the statement.
BlackRock holds a $2.4 billion position in Saudi Aramco. The appointment of Amin Nasser is seen as a strategic move by the asset manager to maintain a diverse and informed perspective on the oil industry while navigating the ongoing debates surrounding ESG investing.
