Buffett facing challenge on policy
Investors concerned about climate change have developed an effective playbook for getting companies to set more ambitious goals for reducing greenhouse gas emissions by pressuring, shaming and cajoling executives.
But those tactics are not working on Warren Buffett and his Berkshire Hathaway conglomerate, which owns energy companies, a railway, insurance companies and other businesses that pump huge amounts of carbon dioxide into the atmosphere. As Buffett holds out, critics complain that Berkshire’s businesses are doing less to cut emissions than similar companies.
Buffett has resisted shareholders who want Berkshire to provide detailed climate disclosures that encompass the whole company, not just parts of it, and spend more on sustainability. His stand may seem odd to some people, given that he has at times backed progressive causes, including higher taxes on the wealthy. He has also pledged to give away nearly all his wealth and has given billions to causes embraced by the left.
Buffett has argued that subsidiaries such as Berkshire Hathaway Energy disclose plenty of information about their emissions and are spending billions of dollars on renewable energy.
“I don’t think they read our annual reports,” Buffett said at last year’s meeting, referring to the shareholder group.
Berkshire and its energy subsidiary declined to comment for this article.
Despite Buffett’s insistence that his businesses are doing a lot to fight climate change, the company’s energy subsidiary, in particular, has set weaker targets for carbon emissions than other utility companies such as Duke Energy and Dominion Energy.
“They’re lagging behind their peers,” said Dan Bakal, a senior program director at Ceres, a nonprofit group that works with investors and companies on environmental issues.
The confrontation between climate activists and Buffett is likely to flare again next weekend at Berkshire’s annual gathering — a folksy affair often referred to as “Woodstock for capitalists.” Shareholders will vote on a proposal from the dissident investors that asks Berkshire to overhaul how it views climate risks and take other environmental measures.
The proposal, like a similar one last year, is not binding and is likely to be defeated because Buffett holds special shares that give him more votes than other shareholders.
But the vote tally could still be embarrassing to Buffett if it signals that most shareholders disagree with him.
The activist investors contend that their proposal last year won majority support among the many shareholders — including large investment firms such as Blackrock, Vanguard and State Street — that are not part of a Berkshire’s inner circle.