A former NASA climate scientist will go toe-to-toe with business tycoon Warren Buffett this weekend over a shareholder’s climate change resolution slated for a vote at Berkshire Hathaway’s annual meeting in Omaha.
Buffett, who is chairman of the multi-billion dollar holding company, advised shareholders in February not to vote for the resolution because it makes little business sense. The resolution would direct Berkshire to conduct an assessment of how climate change is affecting the company’s sizable insurance business.
The Nebraska Peace Foundation, a philanthropic group that owns one share of Class A common stock in the company worth more than $200,000, introduced the proposal earlier this year. The foundation supports social activism to combat climate change, nuclear weapons and racism.
Most of the company’s board of directors are favoring a no vote on the resolution. To sway them to go in the opposite direction, the peace foundation has convinced James Hansen, a former NASA climate scientist who is known for his work on climate change, to address the shareholder meeting.
“Hansen’s comments will focus on the need for urgent action to confront this climate peril and the need for bold leadership by the business community,” said a statement issued Wednesday announcing a call later this week to discuss the resolution.
The peace foundation and a related group called Bold Nebraska will hold a rally outside of the annual meeting to urge action on climate change. But they may have a hard time convincing the directors, especially when they already appear to have their minds made up.
“As a citizen, you may understandably find climate change keeping you up at nights. As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries,” Buffett said in a February letter to shareholders included in the company’s 2015 Annual Report. The directors reiterated his comments in a business filing last month urging shareholders not to vote in favor of the resolution.
Buffett does not think it makes good business sense for Berkshire Hathaway’s insurance arm to take up climate change by creating insurance products that guard against catastrophic weather events related to global warming. Catastrophic storms are called “super-cats” in the insurance world, which is short for “super catastrophe.”
“Up to now, climate change has not produced more frequent or more costly hurricanes or other weather-related events covered by insurance,” the filing reads. “As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business.”
The peace foundation resolution calls for Berkshire Hathaway to issue a report by its insurance division on the risks posed by the threat of climate change, including specific initiatives and goals related to the risks.
“Claims exposure to weather-related events requires that insurance and reinsurance companies take the lead in evaluating and managing the impact of extreme weather,” its resolution reads. “Meanwhile, climate change could have unanticipated adverse effects on the investments of insurers.”
