‘Climate laggard’ Berkshire Hathaway resists investor calls to align to climate standards
Berkshire Hathaway will fight to fend off a fresh set of climate policy demands when shareholders gather for its annual general meeting (AGM) at the end of April. It will argue that climate change should only a factor in underwriting and should now be cause for deeper policy changes.
The statement from management was made in response to a private investor demanding climate policy and reporting for Berkshire Hathaway's insurance activities sufficient to meet the Paris Agreement, draft resolutions for the AGM show.
" Berkshire is a climate laggard in the global insurance sector, scoring in the bottom in a survey of the 30 largest global insurers, due largely to its lack of restrictions on fossil fuel underwriting and investments," the shareholder draft resolution claims.
"In contrast, peers are beginning to address the [greenhouse gas] emissions associated with their underwriting and investment activities," they say, citing actions by global insurers in the United Nations’ Net Zero Insurance Alliance.
But Berkshire Hathaway has said it "does not believe" such a policy is "necessary" and says its business goals are restricted to risk transfer. As such, climate risks are simply one risk amongst many impacting underwriting decisions.
"The primary business of Berkshire’s insurance operations is to monitor, assess and price risk," Berkshire's management wrote in its rebuttal. Core procedures include "consideration of the frequency and severity of weather events" that might further direct underwriting, management wrote.
Berkshire Hathaway fought off a similar shareholder demand in its 2021 AGM, shareholders and management noted in the draft resolutions. Warren Buffett, Berkshire Hathaway’s CEO and board chair, currently has a 32% voting interest in the company.
A separate group of shareholders has demanded a group-wide climate policy with annual climate assessments at the group level for greater investor transparency.
"The Company’s current disclosures are insufficient for investors to fully appraise climate-related risks and opportunities," the investor group claims.
Berkshire defends its current practice of reporting climate goals and policy only at the level of individual subsidiaries. The picture should not be blurred by mixing low-emissions units with its heavier footprints in Berkshire Hathaway Energy and the rail line operations of BNSF, management said in its response.
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