Manager of NZ's 'world first' climate fund appointed CEO of world's biggest oil company two weeks earlier
The fund manager who launched a world first climate investment fund for getting New Zealand to 100% clean energy appointed the CEO of the worlds biggest oil company to its board just two weeks beforehand. BlackRock is an outspoken advocate for moving investments towards clean energy, but is also a major oil industry investor. Two weeks prior to the Governments August 9 revelation that it had partnered with the firm to launch a $2bn New Zealand-based renewable energy fund , BlackRock announced it was appointing Amin Nasser, chief executive of oil giant Saudi Aramco , to its board of directors, a move seemingly at odds with its promises to shift towards climate-friendly investments. Aramco is the worlds largest oil producer . Nassers appointment prompted some New Zealand fund managers to question the firms commitment to decarbonising with one KiwiSaver provider today announcing it was selling its stake as a result. This undermines everything BlackRock has said and done over the last five years about it leading the transition to a lower carbon world, said Pathfinder chief executive John Berry. Pathfinders chief investment officer Paul Brownsey said the firm would sell its small holding in BlackRock, citing concerns about Nassers role and the message sent by his appointment. As an ethical fund manager, the risk of being invested in BlackRock now outweighs the benefit, Brownsey said. The new $2bn New Zealand-based fund announced with fanfare by Prime Minister Chris Hipkins, Energy Minister Megan Woods and Climate Change Minister James Shaw alongside BlackRock executives in Auckland is being billed as helping New Zealand reach 100% clean sources of electricity. It will invest in projects like wind, solar, battery storage, EV charging stations and green hydrogen. The money invested wont be BlackRocks the firm manages funds on behalf of investors , and is pitching for business from New Zealand institutions including retirement funds and Government nest eggs. $2b is a drop in the ocean, even in terms of New Zealands need for clean energy finance, let alone when compared with BlackRocks holdings on a global scale. But it will contribute in a small way to balancing the climate impact of the companys large fossil fuel investments. As the world heats, banks and investment companies are under pressure to take responsibility for the climate footprint of their lending and investments whats known as their Scope 3 impact, a tally which includes their shares in and loans to fossil fuel companies. Many New Zealand companies now have to disclose this impact , and US firms will soon face similar rules . A UN panel including New Zealands own climate chief Rod Carr recently said there is no way the world can address the crisis without companies tackling these wider impacts . The firm has said Nassers appointment as an independent director reflected the importance of the Middle East to its long-term strategy, once Bader Alsaad, chairman of the board of the Arab Fund for Economic and Social Development, leaves the board next year. He brings to the BlackRock Board his perspective as the chief executive of a company at the centre of some of the most important business trends globally, BlackRock said in a statement , while declining further interviews with international media. While the appointment itself doesnt change BlackRocks investment portfolio, it raised new questions about the overall climate impact and direction of the hugely influential firm, which has $10 trillion under management . Aramco under Nasser remains focussed on expanding oil and gas production , after posting record profits in 2022. The International Energy Agency says no new sources of oil and gas are needed if the world wants to stay inside 1.5C heating (a goal New Zealand and most other countries subscribe to), and has found that too much money is still flowing into polluting investments . Nassers appointment also sparked a quick reaction from some US fund managers, who said it went against everything BlackRock chief executive Larry Fink had been saying about being a leader in the green economy , and made BlackRocks board climate-conflicted . Pathfinders Brownsey echoed those worries. He said that despite negative chat about BlackRock previously, it hadnt been a company that screened badly for responsible investing until now. Blackrock, through its clients, is a large investor in the new technologies we need to transition to a low carbon world and while we had felt Blackrock could do more in this space, we continued to hold their stock while they legitimately made progress. From a financial perspective it has been a good, stable investment, he said. But after the appointment of Amin Nasser...we have decided to divest. We dont yet know enough about how much influence Nasser will exert. Despite that, the message Blackrock is sending with his appointment is not one we align with [and] the risk of being invested in Blackrock now outweighs the benefit. On Monday, Prime Minister Hipkins told reporters that New Zealand investors had told him there were no big, local renewable energy funds for them to invest in, and that the BlackRock fund would change that. BlackRock has previously invested in a New Zealand solar startup and also has a climate infrastructure business. "Theyre out there looking for New Zealand-based equity investors at the moment; thats their primary market for the fund that they are establishing, and they have a range of renewable energy investments that theyre keen to invest in, he said. Stuff is seeking additional comments from Hipkins.