A few days before the publication of the EU Sustainable Finance Strategy, Reclaim Finance and the Observatoire des multinationales have revealed the extent of BlackRock’s influence over the EU’s climate finance plans. The report, entitled “Hijacked: Exposing BlackRock’s Grip on the EU’s Climate Finance Plans”, finds that the world’s largest asset manager sits at the heart of a lobbying web with privileged access to European institutions.

While some impacts are already visible, this deep analysis into BlackRock’s policy agenda raises the alarm about the dangers of such influence, for both climate and good governance. With the Commission set to publish, today, a controversial report on environmental banking regulations written for it by BlackRock this issue is more timely than ever.

With €30million spent per year on lobbying EU institutions, BlackRock and the 23 groups it belongs to have the means to make their voices heard. They’ve collectively answered to 22 EU public consultations related to sustainable finance. Analysis of these consultations show clear resistance to stringent requirements and to sustainable finance regulation in general (1).

With multiple private meetings held with key EU agencies, this lobbying web has also secured a prominent place for itself in the Commission’s expert or working groups (2), including groups working on green finance. The report also delves into the relationships and recruitments taking place between BlackRock and government, helping to grease the wheels in Brussels and beyond.

With the Renewed Sustainable Finance Strategy to be released on July 6th, the stakes are high on whether the pressure exerted by multiple asset managers will end up in weakened ambition. BlackRock’s lobbying web – including 4 of the 6 groups in which it holds a senior role – actively opposed the creation of a taxonomy on harmful activities (3) as well as lobbied to delay the implementation of stringent disclosure rules (4), two tools aimed at reducing greenwashing.

But it seems at any rate that BlackRock already has a foot in the door, both by successfully pushing for voluntary Green Bond Standards (rather than mandatory) and thanks to the contract it signed to help the European Commission design ESG banking rules, one of nine signed with EU institutions or agencies since 2016.

The report raises the alarm on the climate rulebook defended by BlackRock and friend groups. While opposing any kind of (even minimal) climate-related restrictions that would be imposed on financial players and their investment choices, the alternative they push forward is highly problematic. BlackRock’s approach, focused on more data and disclosures but pushing back on introducing science based definitions of what is sustainable, aims to blur the lines. It offers a backward-looking vision of climate finance. Moreover, BlackRock has a deep vested interest in the survival of the fossil fuel industry, with multiple ties to the sector (5) which could explain its push back on ambitious climate rules that would affect its bottom line. It’s trying to rig the game in its own favor.

It’s long past time to rethink our financial systems and for regulation to reflect the need for no investments in new oil, gas and coal (6). Whether it’s green bonds or polluting taxonomies, that requires strong regulation, on climate as elsewhere, not a light touch and a handshake. Let’s hope EU regulators will be up to the challenge.

Notes :

1. According to a study by InfluenceMap (September 2020), BlackRock is one of the least climate-friendly members of the trade associations lobbying on European sustainable finance policy.
2. Examples include the High-Level Forum on Capital Markets Union set by the EC, the Commission’s Platform on Sustainable Finance, or the multiple consultative groups organized by ESMA (European Securities and Markets Authority).
3. EFAMA, AFME, IIF and AIMA, all four counting BlackRock as an active member, have also opposed the creation of a taxonomy of “polluting activities”. BlackRock is also part of 5 other groups that have opposed it.
4. As for the Disclosure regulation (SFDR), ICMA, EFAMA and ICI asked for a delayed application and weakened requirements.
5. BlackRock has 5% of shares or more in all top European oil and gas majors. Its own board of directors has several ties to the industry (e.g. Pamela Daley also sits on the board of BP and until 2016 was on the board of BG Group, a gas corporation then acquired by Shell). BlackRock also has close commercial relations with many fossil fuel majors and appears to have a strong voting bias, including on ESG proposals, when it does.
6. Companies’ fossil fuel expansion plans are incompatible with a net zero world according to climate science and even to the International Energy Agency.

Find out more:

• Read the full report here.
• Read Reclaim Finance’s scorecard report on 29 big asset managers including BlackRock (April 2021).
• Read Change Finance’s report ‘The BlackRock Model’ (December 2020).
• Read Change Finance’s analysis of the draft report by BlackRock for the European Commission, on environmental banking regulations.