Buffett, Berkshire Hathaway investors refuse to take stand on climate change (+video)
Berkshire Hathaway hosted its annual meeting this past weekend, where investors and company leadership discussed key problems facing the company and its subsidiaries today.
At Berkshire Hathaway’s annual shareholder meeting this week, the company's leadership showed its commitment to staying the course on climate change.
Tens of thousands of investors attended the meeting, where Berkshire Hathaway subsidiaries such as Fruit of the Loom and See’s Candies displayed their wares. All were gathered for a chance to hear Berkshire Hathaway’s chairman, Warren Buffett, and vice chairman Charles Munger, address the crucial issues facing companies like Berkshire Hathaway in coming years.
Mr. Buffett spoke to the issue of hedge fund management, telling investors that there are far more benefits to investing money through index funds and the stock market than through hedge funds with costly managers.
"There's been far, far, far more money made by people in Wall Street through salesmanship abilities,” said Buffett, “than through investment abilities."
Unsurprisingly, talk also turned to the looming election.
When asked whether Berkshire Hathaway would be in trouble if Donald Trump was elected president, Buffett responded that he was unconcerned about the impact that any of the presidential candidates could have on Berkshire Hathaway’s business interests.
Perhaps most significantly, however, Berkshire Hathaway investors determined that it is unnecessary for the company to issue a report on the risks of climate change for its insurance vendors.
While Buffett maintains that he sees climate change as a societal concern, he says he does not find it necessary to make a public statement on the matter because it does not impact Berkshire Hathaway’s business.
Buffett also refused to make a public statement in favor of reducing fossil fuel use.
Is there a danger in such a large, influential company choosing not to make a statement on climate change?
Recently, businesses have been stepping forward to make statements on climate change, and to address the impacts that global climate change, sea level rise, and resource scarcity could have on their businesses.
“In the early 90s there was a sense that business was holding us back and governments were trying to push forward,” David Levy, a professor at the University of Massachusetts, Boston, told Time magazine in September. “Now, companies are coming forward to say, ‘This is important.'”
In September, nine Fortune 500 companies announced that they would be switching to renewable energy for all of their energy needs.
These companies, which include such big names as Walmart, Starbucks, and Johnson & Johnson, set various timelines to achieve their goal, with the latest set for 2050.
Saving the world also benefits businesses. If climate change continues unabated, the world stands to see millions of dollars in GDP loss because of shifting climate conditions and severe weather events.
Despite Buffett’s reticence this weekend, however, Berkshire Hathaway has not been silent on climate change.
In July, 2015, Berkshire Hathaway Energy joined with other companies to sign the American Business Act on Climate Pledge, to demonstrate their intent to tackle the problem of climate change.
“For more than a decade, we have been making significant investments to reduce the impact of our operations on the environment and fostering a more sustainable future by developing renewable energy generation and reducing emissions from our facilities,” said Greg Abel, Berkshire Hathaway Energy’s chairman and CEO, said in a statement. “Joining these other U.S. businesses is one more way we can demonstrate our commitment to lead on climate action.”
Despite Berkshire Hathaway Energy’s pledge. Buffett was forced at the investor meeting this weekend to defend rate hikes by NV Energy. Critics say these rate changes could discourage households from obtaining solar panels.
Buffett told meeting attendees that the old rates were unfair to rate payers, who were forced to help subsidize solar power for others.
Yet, as climate scientist Jim Hansen said at the meeting, this could be a dangerous precedent. “As long as fossil fuels appear to be the cheapest energy," said Hansen, "we will continue burning them,”