Berkshire Hathaway’s Warren Buffett urged shareholders to vote down two proposals that would force the nearly $ 600 billion industrial insurance conglomerate to announce its efforts to tackle climate change and diversity and inclusion in the workforce.
The company told investors that it did not consider a formal annual assessment of how it manages climate-related risks to be ‘essential’, noting that the board had already received regular reports on the matter, according to proxy materials sent to shareholders. .
Berkshire’s response comes as investors push wide for greater climate-related disclosure from companies operating in every sector of the economy.
Many fund managers expect the government’s Biden government to provide greater support than its predecessor.
The new annual announcement of the conglomerate was proposed by three funds that have Berkshire shares worth just under $ 2.5 billion, according to Bloomberg data: the California pension system, the Federal Hermes and Caisse de dépôt et place du Québec . They warned that climate change posed a ‘systemic risk to the economy’ and many businesses.
“Many risks are already taking effect, affecting the value of companies in various sectors,” the group wrote. “We consider the company’s current level of disclosure to be insufficient for investors to fully assess its significant climate – related risks and opportunities.”
In response, Berkshire’s council pointed to its infamous small central office – which numbered just 26 people at the end of last year – and the ‘unusually decentralized’ way it works as part of the reason it opposes the proposal.
“As many of Berkshire’s subsidiaries already make sound climate – related decisions, and more importantly because the board believes that the shareholders ‘proposal is not in line with Berkshire’s culture, the board recommends that our shareholders vote against the shareholders’ proposal,” the board of Berkshire written.
In addition to owning natural gas pipelines and electric power services, Berkshire also took a $ 4.1 billion stake in the large oil in Chevron last year.
The board also pushed back against a second proposal from the group as You Sow of shareholders working on behalf of Handlery Hotels, which seeks data to determine the success of Berkshire’s diversity and inclusion programs.
“Berkshire’s companies represent different industries operating in different locations around the world,” the board wrote. “It would be unreasonable to ask for uniform, quantitative reporting to compare such different operations in different geographical locations.”
Berkshire has in the past successfully repulsed shareholders’ proposals. Buffett controls 32 percent of the vote, given his high-stakes A-share ownership.
A growing number of money managers are incorporating environmental, social and corporate governance into their investment mandate. Allison Herren Lee, interim chair of the Securities and Exchange Commission, said on Monday that questions about climate and ESG are now ‘key to investors’ and ‘foremost and central’ for the regulator.
Berkshire announced on Monday that Buffett, 90, received a salary and benefits worth $ 380,328 last year, but little changed from the year before. Berkshire’s vice-chairmen, Greg Abel and Ajit Jain, each paid $ 20 million in 2020. The two are considered by investors to be the leading candidates to replace Buffett.
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