The European ombudsman has requested a meeting with the European Commission over its decision to appoint BlackRock for an environmental, social and governance study.
The European Commission hired BlackRock’s financial markets advisory unit this year to develop tools and mechanisms to integrate ESG factors into the European Union banking prudential framework. These tools would also be used for banks' business strategies and investment policies. The firm will perform analysis to help inform the commission’s Action Plan on Sustainable Finance.
However, the European Ombudsman said in a letter published on its website on Sunday that it had received complaints against the commission over the appointment from members of European Parliament and Change Finance, a coalition of civil society organizations and citizens that campaigns for financial sector reform. The letter is signed by European Ombudsman Emily O'Reilly.
"The complainants' concerns focus on whether all applicable procedures have been duly respected, particularly as regards the evaluation of any conflicts of interest and the measures to prevent any such conflicts," the letter said.
Complainants are concerned about measures outlined by BlackRock to prevent conflicts, "and whether the commission has the necessary means to monitor the effectiveness of these measures."
The ombudsman is pursuing the inquiry — opened in May — to examine how the European Commission assessed the conflicts of interest risk.
The ombudsman wants a meeting with the commission and to inspect the relevant file related to the contract before July 17, the letter said.
The European Ombudsman, an independent body, holds the EU's institutions and agencies to account.
The commission said it will be fully cooperative and transparent with the ombudsman.
“The procedure for awarding this contract was carried out in full and strict compliance with the applicable EU procurement rules, including those on the eligibility of tenderers and the prevention of any potential conflict of interest,” a spokesman said in an email. “The selection process was made on the basis of a set of standard criteria which included, amongst other things, the quality of the offer, the ability to deliver input on the elements included in the tender, technical and professional experience, and the ability to carry out a broad mapping of best practices in the EU. Blackrock’s proposal was the best offer compared to the other tenders — both technically and financially.”
The study by BlackRock will be one of many reports and consultations that will help to inform the commission’s sustainable finance policy, the spokesman said. “The commission will make its own policy choices independently, based on exchanges with — and input from — all relevant stakeholders in the field.” It will also carry out impact assessments.
A statement by BlackRock said: “FMA is a distinct business within BlackRock, with established policies and procedures to safeguard the sensitive nature of our client information, and operates behind a stringent information barrier. Since its inception in 2008, FMA’s information barriers have been reviewed and audited by numerous clients, including some of the world’s largest and most sophisticated official institutions.”