EU investigates decision to hire BlackRock to advise on green rules for banks

BRUSSELS (Reuters) – The European Commission’s decision to hire BlackRock BLK.N, the world’s largest asset manager, to advise it on new environmental rules for banks, has triggered an investigation by the European Ombudsman following complaints by several lawmakers and a civil group.

The Change Finance coalition teamed up with 91 civil society bodies three months ago to urge the EU executive to annul the 280,000-euro ($315,868) contract because of potential conflicts of interest.

Under the contract awarded in April, BlackRock’s Financial Markets Advisory is to develop tools and mechanisms to integrate environmental, social and governance (ESG) factors into the EU banking framework and into banks’ business strategies and investment policies.

The EU watchdog said it wants to inspect the Commission’s files and clarify certain matters with its officials.

“I have decided to pursue this inquiry to examine how the Commission assessed the risk of conflicts of interest posed by BlackRock Investment Managements bid, in relation to the specific tasks to be carried out under the study in question,” ombudsman Emily O’Reilly said in a statement.

She cited complainants’ concerns about whether measures proposed by the company were adequate to prevent conflicts of interest and whether the Commission has the means to monitor the effectiveness of the measures.

The Commission said it would cooperate with the Ombudsman and that it had followed EU procurement rules in handing out the contract.

See the full story at: