Warren Buffett’s Berkshire Hathaway asked shareholders to vote against two proposals that would force the conglomerate of nearly $ 600 billion of insurance industrialists to publicize their 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 “necessary”, noting that the board already received regular reports on the matter, according to proxy materials sent to shareholders.
Berkshire’s response comes at a time when investors are making ample effort for more climate-related disclosures from companies operating in all sectors of the economy.
Many fund managers expect the Biden administration to provide greater regulatory support for this move than its predecessor.
The conglomerate’s new annual disclosures were proposed by three funds holding Berkshire shares worth just under $ 2.5 billion, according to Bloomberg data: the California Public Employees’ Retirement System, Federated Hermes and Caisse Et Placement Du Quebec. They warned that climate change represents a “systemic risk for the economy” and for many companies.
“Many risks are already taking place, impacting the value of companies in various sectors,” wrote the group. “We consider the company’s current level of disclosure to be insufficient for investors to fully assess its relevant climate-related risks and opportunities.”
In response, the Berkshire board pointed to its notoriously small head office – which at the end of last year had only 26 people – and the “extraordinarily decentralized” way it works as part of the reason for its opposition to the proposal.
“Since many of Berkshire’s subsidiaries are already making sound climate-related decisions, and more importantly because the board believes that the shareholders ‘proposal is inconsistent with Berkshire’s culture, the board recommends that our shareholders vote against the shareholders’ proposal. , ”Wrote the Berkshire board.
Alongside its ownership of natural gas pipelines and electricity utilities, Berkshire also acquired a $ 4.1 billion stake in Chevron oil last year.
The board also objected to a second proposal by the stockholder advocacy group As You Sow, which worked on behalf of Handlery Hotels, which sought data to measure the success of Berkshire’s diversity and inclusion programs.
“Berkshire’s operating businesses represent different sectors that operate in various locations around the world,” wrote the board. “It would be unreasonable to ask for uniform quantitative reports for the purpose of comparing such different operations in different geographic locations.”
In the past, Berkshire has successfully rejected shareholder proposals. Buffett controls 32 percent of the vote, given his ownership of class A shares with the company’s highest vote.
An increasing number of money managers are incorporating environmental, social and corporate governance into their investment mandate. Allison Herren Lee, acting president of the Securities and Exchange Commission, said on Monday that climate and ESG issues are now “key to investors” and “front and center” for the regulator.
Berkshire reported on Monday that Buffett, 90, received a salary and benefits of $ 380,328 last year, little change from the previous year. Berkshire vice presidents Greg Abel and Ajit Jain each received $ 19 million each in 2020. Both are seen by investors as the top candidates to replace Buffett.
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