|
European Ombudsman Emily O'Reilly launched an inquiry after the
EU executive in March appointed BlackRock, through the company's
Financial Markets Advisory unit (FMA), to produce a study that
would inform EU plans to integrate sustainability into banking
prudential rules.
EU lawmakers and NGO Change Finance questioned BlackRock's
ability to provide impartial advice as its $7.8 trillion in
assets under management includes large stakes in fossil fuel
industries and in banks affected by the regulations.
In a decision on Wednesday, O'Reilly stopped short of calling
for the Commission to cancel the contract, but said it should
have exercised "significantly more critical scrutiny" of
BlackRock's application.
"Questions should have been asked about motivation, pricing
strategy and whether internal measures taken by the company to
prevent conflicts of interest were really adequate," she said.
CANCELLATION CALL
Change Finance on Wednesday called for the contract to be
cancelled, and published a report with NGO Corporate Europe
Observatory, which said BlackRock and industry groups it is a
member of have lobbied to weaken planned EU green finance rules.
A BlackRock spokesman said the Commission had already publicly
stated that the technical quality of FMA’s proposal underpinned
the contract win.
"FMA has taken a wide-ranging and inclusive approach, including
academia, civil society, banks, supervisors and market
practitioners, and looks forward to completing its work and
delivering its final report to the Commission," he said.
The European Commission said it welcomed the Ombudsman's
findings, which did not find evidence of maladministration, and
would study its recommendations in detail.
"It confirms what we have said throughout this process: we
applied the rules fully and fairly," a spokesman said.
BlackRock beat eight other bidders with its offer of 280,000
euros ($334,000) - roughly half the contract's estimated value.
This "exceptionally low financial offer" could be seen as an
attempt to secure influence over policies, the Ombudsman said.
BlackRock said it would ensure "physical segregation" of FMA to
ensure information did not flow to other parts of its business.
Brussels is undergoing a mammoth policy overhaul, revising
energy, farming and finance regulations to better support EU
plans to rapidly cut greenhouse gas emissions.
Amid increased scrutiny of existing EU rules, the Ombudsman
criticised the Commission last week for granting priority status
to gas projects without properly assessing their climate impact.
(Reporting by Kate Abnett, Simon Jessop; Editing by Gareth
Jones)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
