In April 2020, BlackRock was awarded a contract from the Commission to study how the EU can best incorporate environmental, social and governance (ESG) criteria in its banking supervision. This decision was met with – to put it kindly – great disbelief, as massive conflicts of interest were ignored by the Commission. BlackRock is a top three investor in the eight largest oil companies and a top ten investor in the 12 most systemically relevant banks worldwide. In a letter to the Ombudswoman, we Greens had doubted the legality of the awarded contract on the basis of these conflicts of interest. Now, on our initiative, the Ombudswoman has identified instances of maladministration in the application of Union law and has called on the Commission to revise its criteria for avoiding conflicts of interest in their public procurement more generally.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The Ombudswoman’s hefty criticism of the EU Commission is an important success against conflicts of interest in public procurement. It is absurd that one of the largest investors in banks and fossil fuel companies is allowed to advise the EU Commission on sustainability criteria for banks. The company itself is affected by the criteria that BlackRock was supposed to develop. The Ombudswoman’s criticism of the shortcomings in this procurement process was overdue.
This groundbreaking decision by the ombudswoman is based on a letter from our parliamentary group. I had already warned the Commission myself before the contract was awarded that it was in breach of Union law. Unfortunately, the Ombudswoman did not ask the EU Commission to terminate the contract with BlackRock. As guardian of the treaties, the EU Commission must now withdraw the contract with BlackRock. We have asked the EU Commission to do so in another letter today.
The Ombudswoman not only criticized the abuses in the awarding of the contract, but also called on the Commission to rethink its criteria for avoiding conflicts of interest in the procurement guidelines as a whole. This is urgently needed, because consulting firms must not advise the public side on the regulation of companies and at the same time help their private customers to circumvent these rules. The EU Commission must now revise its procurement guidelines as quickly as possible. The EU big consulting firms like KPMG, Ernst & Young & Co. must eliminate conflicts of interest. In general, the state must become more independent of external consulting firms through an attractive and well-equipped public service.”
Press release from the Ombudswoman:
Our complaint to Emily O’Reilly, 17 April 2020: https://sven-giegold.de/wp-content/uploads/2020/11/Letter-to-the-EU-Ombudswoman-BlackRock-contract-17-April-2020.pdf