Warren Buffett Faces Renewed Climate Change Challenge by Investors

Investors concerned about climate change have developed an effective playbook to pressure companies to set more ambitious targets for reducing greenhouse gas emissions, embarrassing and mocking executives. Coins

But these tactics are not working for Warren Buffett and his Berkshire Hathaway group, which owns energy companies, a railway, companies and other businesses that insure large amounts of carbon dioxide in the atmosphere. As Mr Buffett points out, critics complain that Berkshire’s businesses are doing less to reduce emissions than similar companies.

Mr Buffett has repeatedly resisted shareholders who want Berkshire to provide meteorological disclosures that surround the entire company, not just parts of it, and spend more on sustainability. His stance may seem strange to some, as he has sometimes backed progressive causes, including higher taxes on the rich. He has also promised to give almost all his wealth and billions to leftist causes.

Mr Buffett argues that subsidiaries such as Berkshire Hathaway Energy reveal a lot of information about their emissions and are spending billions of dollars on renewable energy.

“I don’t think they read our annual reports,” he said. Buffett was referring to the shareholder group at last year’s meeting.

Berkshire and its energy subsidiary declined to comment on the article.

Despite Mr Buffett’s insistence that his business is doing more to combat climate change, the company’s energy subsidiary in particular has set weaker carbon emissions targets than other utility companies such as Duke Energy and Dominion Energy. Are set.

“They are behind their peers,” said Dan Buckle, a senior program director at Ceres, a nonprofit group that works with investors and companies on environmental issues.

Climate and Mr Clash. Buffett is likely to re-emerge at Berkshire’s annual gathering next weekend – a foxy affair often referred to as “Woodstock for Capitalists.” Shareholders will vote on a proposal from dissenting investors asking Berkshire how it views climate risks and takes environmental measures.

The proposal, like last year’s, is not binding and is likely to lose because Mr Buffett has special shares that make him more popular than other shareholders.

But the turnout could still be embarrassing for Mr If Buffett indicates that most shareholders do not agree.

Active investors claim that their proposal last year won the support of a majority of many shareholders, including large investment firms such as Black Rock, Vanguard and State Street, which are not part of Berkshire’s inner circle. , Which consists of Mr Mike. He has a long association with Buffett and people and institutions.

Some analysts who follow the company say they are not surprised. Buffett opposes the climate change proposal because he has long felt that Berkshire does not disclose enough details about his corporate empire.

“It’s just a continuation of the corporate style – and a corporate style that’s getting older,” said Kathy Seifert, a CFRA research analyst following Berkshire. “And I think we’re going to see how old the shareholder is with the vote.

Active investors said that if Mr Buffett was arranged in his ways, so were they. His playbook is well-respected and relatively straightforward. First, they try to force companies to strictly estimate and disclose their carbon emissions under the principle that you can’t improve what you don’t measure. Once companies know approximately how much carbon they are releasing, pressure them to come up with a plan to reduce emissions in the medium to long term. Companies can then be judged against these plans, and more pressure can be applied when businesses fail to meet targets.

As companies take steps to grow greener, they promise to reduce emissions from their operations and from the power plants from which they purchase electricity. Some go even further and plan to reduce the carbon footprint of their suppliers and consumers, known as Scope 3 emissions.

The golden standard of climate promise is to reach “pure zero” – which means that no company is emitting greenhouse gases as a whole, including its supply chain and its products through consumers. Usage. Many businesses hope to reach this point by switching to renewable energy and finding ways – such as planting trees and catching carbon directly from the air – so that they can still meet any carbon dioxide emissions. ۔

As more companies publish details of their emissions and plans, it is becoming easier to compare businesses.

Climate Action 100+, an investor-backed group that monitors the climate commitments of the largest corporate emitters, said last year that Berkshire Hathaway Failed to meet any group criteria. It found that other major US companies met or at least met some of its standards.

For example, the three major electrical utilities – Duke, Dominion and Excel Energy – aim to reduce some Scope 3 emissions. But Berkshire Hathaway Energy has not publicly promised to reduce Scope 3 emissions.

“Both Duke and Dominion are now leading energy companies on this front,” said Daniel Fuegger, as you are the president of SOU, a shareholder advocacy group that has been involved in these companies’ recent shareholder suggestions on climate change. Represented investors. The proposals were withdrawn after the companies improved their climate plans.

At net-zero, Berkshire Hathaway Energy uses loose language compared to other utilities. Is saying It is striving to achieve net-zero greenhouse gas emissions by 2050 in a way that our consumers can afford, our regulators will allow and help develop the technology. ” Excel Energy And Duke Energy Have said it is committed to reaching zero-zero carbon emissions by 2050.

“It’s a step in the right direction.” “But it’s nowhere near what leading companies are doing,” Buckle of Sears said of Berkshire Hathaway Energy’s interim target.

Berkshire may soon have to make the full climate revelations that dissenting shareholders want. The Securities and Exchange Commission has proposed a rule requiring public companies to report quality weather. But the rule is likely to face legal challenges and could be overturned by the courts.

Rebel Berkshire’s shareholders include the California Public Employees Retirement System and the New Jersey Pension Fund, and they may once again rely on the support of Black Rock, Vanguard and State Street, index mutual fund companies.

Berkshire is fighting back, saying the shareholder group’s claim that it gained a majority of external shareholders last year was “incorrect”, but the company has refused to disclose the number of votes cast. Will support the claim.

One possible wildcard is how the Bill & Melinda Gates Foundation votes for its large block of Berkshire shares, which Mr Buffett has donated to nonprofits for many years. Mr Gates can be expected to vote for Mr Buffett, a longtime friend, a difficult shareholder. But Mr Gates has made climate change a priority in recent years.

The Berkshire shares held by the Bill & Melinda Gates Foundation Trust are managed by Cascade Investments. Foundation and Cascade representatives declined to comment.