Great Britain

EU ‘reflecting’ on conflict of interest rules after BlackRock controversy

The EU is considering introducing new conflict of interest rules after it was criticised for hiring BlackRock, a major manager of oil company and financial shares, to work on new environmental rules for banks.

The European ombudsman found in November found that the European commission, the EU’s executive arm, had not properly considered conflicts of interest when awarding the contract to BlackRock, the world’s biggest investor.

The ombudsman, Emily O’Reilly, also said the commission should strengthen its conflict of interest rules.

The commission said it was “reflecting on possible clarifications relevant to the procedure to follow when a professional conflicting interest may be at stake in a procurement procedure”, according to its response to the ombudsman, published on Monday.

It said it would include updates to its financial regulation on conflicts of interest in a public consultation.

The campaign group Urgewald raised concerns about BlackRock’s alleged conflict of interest, first reported by the Guardian in April 2020. While BlackRock has taken steps in recent years to tighten its policies on the active allocation of money, its role as the world’s biggest provider of passive investments means it holds shares worth billions of dollars in oil companies and banks.

Rasmus Andresen, an MEP with the Greens/European Free Alliance group, said he welcomed the commission’s response, but added “everything depends on the details and the implementation of this revision”. Andresen was among a group of MEPs who wrote to the commission with concerns over the contract.

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“The only question of importance is if the financial regulation at the end will prevent BlackRock and others from getting a leading advising role on policy they have a financial interest in,” Andresen told the Guardian. “The commission should come up with a concrete proposal and formulate the revision in close cooperation with the European parliament as budgetary authority.”

BlackRock declined to comment. It has previously said its bid for the banking rules work was accepted because the commission found it offered the best quality for the lowest price.

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