Billionaire investor Warren Buffett’s company Berkshire Hathaway faces a number of votes related to climate change this weekend as part of its annual shareholders’ meeting on Saturday.
This is the second year in a row that climate change has made its presence known at the meeting. Last year, the meeting was dominated by controversy when a Nebraska anti-war group with shares in the company pushed for a vote on a resolution to do a study on how climate change affects the company’s insurance business.
Buffett had said it made little investment sense to start selling insurance based on the risks posed by climate change, advising a “no” vote on the issue. The resolution was struck down.
But that vote has not discouraged shareholders from raising climate-related proposals again. On May 6, climate change will be a big issue again, with a number of resolutions coming up for a vote before Buffett gives his big address to the meeting in Omaha.
Berkshire shareholders want votes on proposals requiring the sale of the company’s fossil fuel investments, a report disclosing the political contributions its subsidiaries have made to politicians, and finally, a report that describes the company’s efforts to reduce methane emissions that are linked to global warming.
The same group that proposed last year’s resolution, the Nebraska Peace Foundation, has proposed this year’s resolution for Berkshire Hathaway to divest from all fossil fuel investments.
“The board of directors does not believe that divesting its holdings in companies involved in the extracting, processing, and/or burning of fossil fuels within 12 years is appropriate,” the board said in a filing to the Securities Exchange Commission. “The board believes that Berkshire should not limit its universe of potential investments based upon complex social and moral issues. Berkshire’s businesses and the companies in which it invests have corporate governance structures in place to comply with state and federal laws, including compliance with state and federal environmental regulations and laws which reduce the environmental impact of their operations.”
The foundation’s resolution from 2016 was defeated by more than 425,000 share votes.
Most resolutions like these have historically been defeated at the annual meeting, yet the number of them only seem to be increasing. Some analysts say they may be doing more to attract people to the issue than to succeed in changing the company. Last year’s meeting attracted the activist community in droves, with climate change and anti-fossil fuel demonstrations held outside the shareholder event.
The board is also advising shareholders against the other resolutions, which aren’t expected to succeed. On the political disclosure proposal, Buffett has even chimed in to oppose it.
“Berkshire Hathaway — the parent company — has never made a contribution to any presidential candidate (nor any other political candidate) during my 52 years as CEO,” Buffett said in an email to Dow Jones earlier this week. “I am sure that some of our subsidiaries — in particular those in heavily regulated industries — make political contributions and employ lobbyists. I do not participate in these decisions and Berkshire parent has never, to my knowledge, used a lobbyist.”
The resolution is being presented in conjunction with the environmental and social justice investment firm Clean Yield Asset Management.
“Additionally, we do not agree with the proponents’ assertion that gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value,” the board said in its filing. “To the contrary, the board of directors believes the adoption of the reporting being proposed, in addition to creating unnecessary administrative costs, could expose Berkshire subsidiaries to competitive harm without commensurate benefit to our shareholders.”
The board also opposes the resolution on methane. “The board of directors does not believe that issuance of a report reviewing the company’s policies, actions and plans to measure, monitor, mitigate, disclose and set quantitative reduction targets for methane emissions resulting from all operations, including storage and transportation, under the company’s financial or operational control is a prudent exercise to undertake,” the board said in a filing with the Securities and Exchange Commission.
The board explained that even though they recognize the importance of the issue tot shareholders, its natural gas subsidiaries have participated in an Environmental Protection Agency voluntary program for over 20 years to minimize methane releases, called Natural Gas STAR.
