BlackRock might not be 'woke' anymore after the asset manager put an oil CEO on its board

• BlackRock named Aramco CEO Amin Nasser to its board Monday.
• Nasser leads the world's largest oil producer, which is mainly owned by the Saudi Arabian state.
• His appointment clashes with Larry Fink's backing of ESG, or "woke," investing.

BlackRock has drawn the ire of conservatives ever since the world's largest asset manager came out in favor of investing with environmental, social, and governance (ESG) factors in mind — a style dismissed by its right-wing critics as "woke."  

Its decision to name Aramco CEO Amin Nasser to its board Monday provides further ammunition for those critics, signaling that the firm might not be as socially conscious as it says it is.

"Amin Nasser might be a delightful person. But it's symbolically and substantively representing Aramco. That is the wrong player here, unless [BlackRock CEO] Larry Fink really wants to blur their image on the ESG front," Jeffrey Sonnenfeld, the Yale professor and management expert, said on CNBC Tuesday.

Nasser leads the world's largest oil producer, which is mainly owned by the state of Saudi Arabia — the Gulf kingdom that commits flagrant human rights abuses and, according to an intelligence report from the Biden administration, approved the murder of Washington Post journalist Jamal Khashoggi in 2018.

He'll now provide "a unique perspective" for a firm that's made promoting environmental sustainability one of its core business priorities, BlackRock said in a press release.

Fink first brought mainstream attention to his and BlackRock's ESG embrace in 2020, saying in his annual open letter that "climate risk is investment risk."

It's fair to wonder whether he still stands by that statement now Aramco's CEO is on the board of the company that manages assets worth more than $8 trillion.

BlackRock has vigorously defended its ESG practices as both in-line with its fiduciary duty to put its clients' interests first, and a necessary part of properly managing investment risk.

It's gone all-in on ways to invest in the transition to cleaner energy. Last year, one of its funds acquired a Massachusetts-based renewable natural gas company and it hired a former top McKinsey sustainability executive to help spearhead efforts to invest in a low-carbon economy.   

The board appointment complicates that picture, despite BlackRock saying in Monday's press release that Nasser has established Aramco as a leader in promoting the shift.

Saudi Arabia launched a $1.5 billion energy-transition fund late last year, but at the launch of that venture Nasser called the effort to wean the world off fossil fuels "flawed."

"What we need is an optimal, realistic transition plan," he said. "We need to realise that today, alternatives are not ready to shoulder a heavy load of the growing energy demand and therefore we need to work in parallel until alternatives are ready."

Republican politicians have slammed Fink's embrace of ESG in recent years, criticizing BlackRock for implementing what they see as a liberal investing agenda — nevermind the significant stakes the firm owns in big oil producers.

Fink reaffirmed BlackRock's decarbonization efforts last month – but conceded that he'd stopped using the term "ESG" itself, arguing it had been "weaponized" by critics.

Now, conservatives may have another stick to beat him with.