Buffett Rejects Demands to Disclose Climate Change Response and Employee Diversity Information

Letter to Berkshire Shareholders: "Oppose Shareholder Proposals Requesting Disclosure on Climate Change Response and Employee Diversity"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] Berkshire Hathaway, led by Warren Buffett, recently sent a letter to its shareholders. In the letter, Berkshire mentioned that there were two shareholder proposals requesting disclosure of Berkshire's efforts to address climate change and information on employee gender and racial diversity, and asked shareholders to oppose these proposals.

Berkshire emphasized that the board regularly receives reports related to climate change but stated that it does not consider it necessary to formally disclose this information to shareholders annually.

The institutional investors requesting disclosure of climate change response information are the California Public Employees' Retirement System (CalPERS), Caisse de d?p?t et placement du Qu?bec (CDPQ), and the U.S. investment firm Federated Hermes. They pointed out that climate change could pose systemic risks to the economy and companies, and Berkshire is not providing sufficient information to shareholders on this matter.

In the letter, Berkshire argued that its subsidiaries already make business decisions considering climate change, and the shareholders' demand for annual disclosure of related information does not fit Berkshire's culture.

Berkshire holds stakes in natural gas pipelines and electric utilities, as well as shares in the oil company Chevron.

Berkshire also requested opposition to another shareholder proposal asking for disclosure of employee gender and racial diversity information. Berkshire stated that it invests in companies operating in many regions worldwide, and therefore, disclosing employee diversity information quantitatively according to a fixed standard is not realistic given the circumstances.

Berkshire has generally prevailed in votes related to shareholder proposals. Buffett holds 32% of the voting rights.

Meanwhile, Berkshire announced that it paid Chairman Buffett $380,328 last year, including salary and bonuses, an amount similar to that paid in 2019. Vice Chairmen Greg Abel and Ajit Jain each received $19 million last year.

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