47% of Berkshire Hathaway’s Independent Shareholders Support Resolution to Address Emissions Associated With Its Underwriting, Investing Activities
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Stefanie Spear, [email protected], 216-387-1609
BERKELEY, CA—MAY 5, 2022—Berkshire Hathaway Wednesday released voting results from its recent annual general meeting where 47% of independent shareholders (26.5% overall), holding more than $43 billion in shares, voted in favor of a greenhouse gas reduction proposal filed by investor representative As You Sow.
The resolution asks Berkshire to issue a report addressing if and how it intends to measure, disclose, and reduce the greenhouse gas emissions associated with its underwriting, insuring, and investment activities, in alignment with the Paris Agreement’s 1.5⁰C goal requiring net-zero emissions by 2050.
“In its most simple terms, the proposal asks Berkshire to take responsibility for the large contribution to climate change from its insurance operations’ underwriting and investment activities,” said Danielle Fugere, president of As You Sow.
The proposal underscores shareholders’ concern that Berkshire Hathaway is not adequately reducing the climate footprint of its insurance operations — which make up more than 26% of its business and is its largest value segment, creating significant climate risk to the company.
2021 was the second most costly year on record for the world’s insurers, with insured losses totaling $120 billion from natural catastrophes. Berkshire’s combined insurance units posted a $784 million pre-tax underwriting loss largely attributable to $1.7 billion in catastrophe claims, including claims from Hurricane Ida and flooding in Europe. This follows a larger global trend — insured losses from natural disasters reached $42 billion in the first six months of 2021, a 10-year high.
“These losses can no longer be categorized as simply a bad year,” Fugere said. “As noted by Munich Re, economic losses caused by natural catastrophes are trending upward. The litany of national and global events associated with climate change — the fires in California and Colorado, floods across the midwest, the growing strength of hurricanes, and the deep freeze in Texas, to name a few — demonstrate this increasing risk.”
The shareholder proposal notes that Berkshire is not only exposed to climate-related risks, but is actively amplifying these risks through its investment in and underwriting of high carbon activities. Berkshire is one of the largest providers of coverage to the oil and gas industry, surpassing peers such as Chubb and Liberty Mutual. Its shareholdings in coal alone amount to $5.1 billion, far surpassing its American peers.
The global financial sector is rising to the challenge of meeting the Paris Agreement’s goal to maintain global temperature rise at 1.5 degrees Celsius, including leaders in the insurance industry. The Net-Zero Insurance Alliance has grown to 22 members, seven of which are in the top 30 largest global insurers by market cap. All Net-Zero Insurance Alliance members have committed to reaching net-zero emissions from their insurance and reinsurance underwriting portfolios by 2050.
AIG and The Hartford recently committed to reaching net-zero emissions from their underwriting and investment portfolios by 2050 or sooner, following shareholder proposals filed by the Presbyterian Church (USA) and As You Sow respectively.
Berkshire is lagging its American and European peers, a position that increases climate risk globally as well as to its own portfolios.
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As You Sow is the nation’s leading shareholder advocacy nonprofit, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, pesticides, racial justice, workplace diversity, and executive compensation. Click here for As You Sow’s shareholder resolution tracker.