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New York City pension leader opposes election of Aramco's chief as BlackRock director
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New York City pension leader opposes election of Aramco's chief as BlackRock director
May 1, 2024 11:01 AM

NEW YORK/BOSTON (Reuters) - A pension fund for New York City employees urged BlackRock's ( BLK ) shareholders to vote against the election of Saudi Aramco's chief executive as director, citing potential conflicts of interest around the asset manager's decarbonizing strategy as well as human rights concerns.

The world's top asset manager BlackRock ( BLK ) named Amin Nasser, the chief of the world's largest oil company Saudi Aramco as an independent director last year.

On Wednesday, the Comptroller of the City of New York Brad Lander wrote in a securities filing on behalf of the New York City Employees' Retirement System that BlackRock's ( BLK ) shareholders should vote against the election of Nasser at BlackRock's ( BLK ) annual meeting on May 15.

"We believe that potential conflicts of interest compromise Nasser's ability to provide independent oversight, both in general, and particularly concerning BlackRock's ( BLK ) decarbonization strategy," he wrote. BlackRock ( BLK ) manages about $19 billion on behalf of the New York City Employees' Retirement System, which has $43 million invested in the asset manager.

Aramco and BlackRock ( BLK ) did not immediately comment.

BlackRock ( BLK ) has a relatively large board with 16 people currently nominated for election at its shareholder meeting set for May 15. The company has faced questions over the size of the board in the past but its directors easily won re-election last year.

For this year top proxy advisors Institutional Shareholder Services and Glass Lewis had both recommended votes "for" all of BlackRock's ( BLK ) nominees, although they suggested investors vote "against" the pay of CEO Larry Fink over process and performance concerns.

BlackRock ( BLK ) has been under fire from U.S. Republican politicians for its concerns about climate change, although it continues to invest in fossil fuel companies. When Nasser was first named to the company's board of directors last year it was seen as possibly dampening the Republican criticism.

"Nasser and BlackRock ( BLK ) have broadly divergent interests with respect to the need for decarbonization," the New York pension fund said on Wednesday.

"Nasser has a vested interest in - and is an outspoken vocal advocate for - the expansion of fossil fuels," which conflicts with BlackRock's ( BLK ) commitment to reduce greenhouse gas emissions, it said.

In Wednesday's filing the New York City pension fund said Nasser could not be seen as genuinely independent of BlackRock ( BLK ) given a 2022 gas pipeline deal which involved the asset manager and the company, as well as a 2023 bond issuance linked to that acquisition.

The filing also mentioned human rights concerns, saying oil giant Saudi Aramco is "implicated in one of the largest alleged climate-related breaches of international human rights," which would pose reputation risks for BlackRock ( BLK ) and its shareholders.

It referred to a letter of concern sent by U.N. experts last year to Aramco saying its expansion of fossil fuel production and ongoing exploration threatened human rights.

"Considering these factors, Nasser's continued presence on BlackRock's ( BLK ) Board poses a reputational risk to company culture, as well as to the Board and shareholders," the filing said.

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