Berkshire Hathaway opposes shareholder call for climate disclosure

Warren Buffett’s Berkshire Hathaway urged shareholders to reject two proposals that would force the nearly $ 600 billion conglomerate of insurance industries to disclose its efforts to tackle climate change, diversity and population inclusion active.

The company told investors it does not consider a formal annual assessment of how it manages climate-related risks “necessary,” noting that the board is already receiving regular reports on the matter, according to proxy documents. sent to shareholders.

Berkshire’s response comes as investors push for greater climate-related disclosures from companies operating in all sectors of the economy.

Many fund managers expect the Biden administration will give more regulatory support to this initiative than its predecessor.

The conglomerate’s new annual disclosures were offered by three funds that hold Berkshire shares worth just under $ 2.5 billion, according to Bloomberg data: California Public Employees’ Retirement System, Federated Hermes and Caisse Et Placement Du Quebec. They warned that climate change poses a “systemic risk to the economy” and to many businesses.

“Many risks are already taking effect, affecting the value of companies in several sectors,” the group wrote. “We believe the company’s current level of disclosure is insufficient for investors to fully assess its significant climate-related risks and opportunities.”

In response, Berkshire’s board highlighted its notoriously small central office – which at the end of last year was only 26 people – and the “unusually decentralized” way it operates as part of its opposition to proposal.

“Given that many Berkshire subsidiaries are already making sound climate decisions, and more importantly because the board believes the shareholder proposal is incompatible with Berkshire culture, the board recommends that our shareholders vote against the shareholder proposal, ”the Berkshire board wrote.

Along with its ownership of gas pipelines and electric utilities, Berkshire also took a $ 4.1 billion stake in major oil company Chevron last year.

The board also opposed a second proposal by shareholder advocacy group As You Sow, working on behalf of Handlery Hotels, which sought data to assess the success of Berkshire’s diversity and inclusion programs. .

“Berkshire’s operational activities represent different industries operating in multiple locations around the world,” the board wrote. “It would be unreasonable to ask for uniform quantitative reports for the purpose of comparing such dissimilar transactions in different geographic areas.”

Berkshire has in the past successfully rejected shareholder proposals. Buffett controls 32% of the votes, given his ownership of the high-voting Class A shares of the company.

A growing number of portfolio managers are integrating environmental, social and corporate governance into their investment mandate. Allison Herren Lee, acting chairman of the Securities and Exchange Commission, said Monday that climate and ESG issues were now “essential for investors” and “at the forefront” for the regulator.

Berkshire revealed Monday that the 90-year-old Buffett received a salary and benefits worth $ 380,328 last year, little change from the previous year. Berkshire vice-presidents Greg Abel and Ajit Jain were each paid $ 19 million in 2020. Both are seen by investors as prime candidates to replace Buffett.