European Ombudsman calls on EU to update its conflict of interest guidelines for procurement contracts following its decision to hire a business division of world’s leading fossil fuel financier to develop ESG banking regulation study
The European Union’s watchdog has ruled the European Commission failed to adequately consider conflicts of interest when it appointed BlackRock Investment Management, the world’s second largest investor in fossil fuels, to advise on environmental regulations for the banking sector.
The European Ombudsman Emily O’Reilly has called on the bloc’s executive arm to tighten up its guidelines for public contracts after ruling the decision to award the contract to the investment giant “did not provide sufficient guarantees to exclude any legitimate doubt as to the risk of conflicts of interest that could negatively impact the performance of the contract”.
The contract, awarded to the firm from a pool of nine bidders in March, sparked widespread criticism from green groups and MEPs, who argued that a company that manages $87.3bn of shares in fossil fuel companies and owns shares in the overwhelming majority of European banks should not be influencing policy making.
The €280,000 contract, awarded to BlackRock’s Financial Markets Advisory (FMA) arm, was for a study advising how the EU should integrate environmental, social, and governance (ESG) factors into European banking rules.
The EU Ombudsman launched a case in May after receiving complaints from two MEPs and civil society group Change Finance that alleged the firm’s extensive fossil fuel and banking interests meant it was ill-suited to provide advice on EU environmental regulations.