The EU's ombudsman on Wednesday reproached the European Commission for a contract with BlackRock, the world's biggest asset manager, to study sustainable finance regulations which raised conflict-of-interest questions.

Emily O'Reilly, whose role is to be an ethics watchdog over the Commission, criticised current rules on attributing contracts, saying they were "not robust and clear enough to allow officials to find conflict of interest other than in a very narrow range of professional conflicts".

Although her finding cannot cancel the contract to the US company, it comes with recommendations that the vetting rules be overhauled.

It also noted that BlackRock's bidding price for the 280,000-euro ($330,000) contract was "exceptionally low ... which could be perceived as an attempt to assert influence over an investment area of relevance to its clients".

A spokesman for the European Commission responded by saying the ombudsman's report "did not identify any maladministration" and asserted that the current contract-awarding rules were applied "fully and fairly".

O'Reilly's recommendations would be studied, and replied to by the end of March 2021, he said.

The BlackRock contract is to evaluate how to integrate social and environmental factors in EU banking regulations, as part of the bloc's push towards a greener future.

In her report, O'Reilly found that, because BlackRock manages investment in the area it was studying on behalf of the Commission, "there is a clear risk that those interests may influence the outcome of its work in its own favour".

She added that "winning the contract may enable the company to gain insights and assert influence over a growing investment area of major and increasing relevance to its clients, and therefore to the company itself".

- Calls to cancel the contract -

BlackRock manages $7.3 trillion (6.1 trillion euros) in assets and is a shareholder in most of the world's biggest corporations, including oil companies that have to adjust to climate-change policies by the EU and other administrations.

It is aiming to position itself as a leader in investment in green financing.

O'Reilly opened her enquiry into the BlackRock contract after several complaints, including by MEPs.

"This is a win for the integrity of our public policy," said one of the MEPs, Damien Careme of the Greens grouping.

"This decision is clear: the Commission needs to draw the conclusions and immediately cancel the contract," he said.

Another MEP, Pascal Durand of the centrist Renew grouping, said: "The conclusions are very clear and confirm our fears: the Commission did not sufficiently take into account the risk of conflict of interest... and it needs to change its rules."

"By choosing BlackRock, the Commission basically handed Big Finance the steering wheel for the implementation phase of its action plan on sustainable finance.

"If the contract with BlackRock is not withdrawn, that means the final nail in the coffin of a true Green Deal that is aligned with the climate ambitions of the Paris Agreement," said Kenneth Haar, a member of Change Finance Coalition, an NGO calling for ethical corporate behaviour.

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