arren Buffett faces a showdown this weekend with more than 1.6 million ordinary savers over her company’s inability to provide even basic information about its environmental impact and the risks it faces in because of the climate crisis.
The world’s most famous investor has amassed a fortune of $ 102 billion while espousing the benefits of thinking long term. Yet on the biggest problem facing the planet, Buffett appears to be particularly short-sighted.
Over six decades, Buffett – now 90 – has turned Berkshire Hathaway into a vast conglomerate of $ 670 billion worth of businesses selling everything from batteries and power to insurance. Out of 60 different companies in the group, only 15 have published information on sustainable development.
The parent company refuses to make any climate-related disclosure – seen as the bare minimum that companies should do on the matter.
More controversial, Berkshire Hathaway maintains large investments in coal-fired power, a major contributor to the climate crisis.
Now the company’s shareholders, including the largest public pension fund in the United States, are showing flexibility and acting in an attempt to force Buffett’s hand.
The California Public Employees Retirement System (CalPERS), EOS Federated Hermes and the Caisse de dépôt et placement du Québec (CDPQ) have tabled a resolution to report the company on climate risks.
He pits ordinary savers against one of the richest men in the world. If the resolution gets enough votes from the company’s shareholders, Berkshire will need to take action, in what would be a significant victory for shareholder power.
Even if not passed, a big vote in favor of institutional investors would send a strong signal to the market that Berkshire must stop ignoring climate change.
Berkshire’s board of directors has categorically rejected the plan, urging shareholders to vote against it and saying it would not be practical to implement as the group is “exceptionally decentralized”.
Tim Youmans, head of engagement at EOS, who tabled the resolution, says the Buffett company’s approach is “completely insufficient.”
“They didn’t do anything at the parent company level,” Youmans says.
Berkshire is one of the few companies to score zero out of 10 for its climate disclosures on a benchmark designed by Climate Action 100+, an initiative to hold companies to account on emissions.
At Berkshire’s annual general meeting on Saturday, Youmans will stand up and advocate for a change on behalf of investors.
It will be a tall order to muster the necessary votes as Buffett owns almost a third of the voting rights, but Youmans remains confident.
EOS is one of the main voices that speaks to corporate boards and encourages them to take action on issues such as climate change, diversity and governance.
With a staggering $ 1.2 trillion in assets under advice, EOS carries considerable weight. When Youmans and his colleagues present their point of view to company boards, they tend to listen.
EOS has seen notable success against some of the biggest carbon emitters on the planet. In 2019, this helped persuade BP to disclose much more information on climate-related risks.
The company decided to back the proposal which was supported by 99 percent of the shareholders.
“BP has now gone beyond that and changed its whole strategy,” Youmans says, referring to plans presented by the oil giant last year to reduce its investments in fossil fuels over the next decade.
“We think it’s global shareholder power and EOS, to a small extent, has something to do with it.”
Buffett, however, was much less willing to commit.
“Unfortunately, we’ve been trying to talk to Berkshire Hathaway for three years and we haven’t had any dialogue with the parent company during that time,” Youmans says.
“In fact, more recently Warren Buffett, through his secretary general, wrote to me saying he had no interest in talking to me.
What is clear is that Buffett is becoming an increasingly lonely figure in his stance on the climate crisis. More than 1,400 companies have supported a global initiative to disclose information on climate risks.
Climate Action 100+ reports that the initiative, managed by the Climate-Related Financial Disclosures Task Force, is supported by 59 of 167 companies it has identified as the world’s largest greenhouse gas emitting companies .
This public information is important because it allows investors to make informed decisions about where to invest their money.
The pressure is growing as the financial risks posed by climate change increase at the same time …
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This notice was published: 2021-05-01 21:38:37