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Warren Buffett sinks climate shareholder resolution, says world will adapt

51 points by spenrose 5y ago

toomuchtodo 5y ago
Meaningful change is more likely to occur after Buffett and Munger have departed this plane of existence. At 90 and 97 years of age, respectively, no need to hold your breath (based on actuarial tables). Progress on this front is possible (corporate climate change responsibility), and occurring. Check out Engine No 1’s activist success with Exxon within the last week. They pushed for pro climate directors, Blackrock followed (because Blackrock can’t push themselves directly as an indexer), and Exxon lost even after fishing for backpeddlers during the shareholder meeting (which is very much not common or within good taste from a corporate governance perspective). Like a wound, constant pressure must be applied. https://www.cnbc.com/2021/05/26/engine-no-1-gets-at-least-2-candidates-elected-to-exxons-board-in-win-for-the-activist.html https://www.cnbc.com/2021/05/26/engine-no-1-gets-at-least-2-... (Engine No. 1 wins at least 2 Exxon board seats as activist pushes for climate strategy change) https://www.bloomberg.com/opinion/articles/2021-05-27/exxon-lost-a-climate-proxy-fight https://www.bloomberg.com/opinion/articles/2021-05-27/exxon-... (Matt Levine’s take on Exxon)
- kortilla 5y ago
  But engine no. 1 isn’t even close to a majority vote on the board. It’s not clear anything will change and that may have been a huge waste of money.
  - toomuchtodo 5y ago
    The Bloomberg Matt Levine piece covers that. > We talked about the proxy fight yesterday, before the votes were counted. The vote was close, and there were delays, but it looks like Engine No. 1 got at least two of its four director candidates elected to Exxon’s 12-person board. That doesn’t exactly give Engine No. 1 control of Exxon, it doesn’t exactly put Woods’s job in jeopardy, it doesn’t exactly mean that Engine No. 1 can go implement its plans to invest in renewables and become carbon-neutral. It does give Engine No. 1’s directors seats in the boardroom, though, and power to influence Exxon’s strategy. > More important, perhaps, it shows that this can work. Shareholders — even shareholders of Exxon — can do this. If Woods and the other Exxon directors decide to ignore Engine No. 1’s plans, keep doing what they were doing, and stick their fingers in their ears and shout “I can’t hear you” whenever the Engine No. 1 nominees speak at board meetings, then next year Engine No. 1 will run a proxy fight for all of the board seats and win. Exxon’s CEO and directors have to take this shareholder vote seriously, because it proves that the shareholders are willing and able to fire them. You might think that that would be obvious — that the shareholders’ “ownership” of the corporation, and their voting rights, of course meant that they could fire officers and directors whom they didn’t like — but I don’t think it was obvious, and I think in practice it often wasn’t true. Now it is.
    - kortilla 5y ago
      > then next year Engine No. 1 will run a proxy fight for all of the board seats and win That’s a ridiculous assumption.
      - toomuchtodo 5y ago
        Who am I to trust more? Matt Levine, someone with years of equities capital market experience while at Goldman Sachs and who now opines on the capital markets at Bloomberg for a living? Or you? No offense intended, but he is a subject matter expert.
        kortilla 5y ago
        I would trust Matt, who said it was largely a waste of money and said we will have to see if anything actually happens in the future.
        toomuchtodo 5y ago
        I recommend his most recent post on it. > Well! About a hundred of you emailed me to say that it’s obvious what’s in it for Engine No. 1: publicity. This is a hedge fund that launched six months ago; it runs a small fund and doesn’t have much of a track record. Now it is The Little Engine That Took Down Exxon. It has gone from nothing to being a daring successful activist, and an activist with a halo of environmental virtue. It can fundraise off of that forever, attract lots of money, collect lots of fees, etc. The $30 million of proxy expenses are an investment to make millions more in management fees. > A related benefit is what any activist fund gets from a successful proxy fight: The next company they go after will be intimidated by their Exxon victory, and will try to settle by giving them board seats. You spend $30 million on one proxy fight so you don’t have to spend any money on five more. You show up at a meeting with the next company’s CEO, you put Exxon’s severed head on the table, you say “board seats, now,” and you get them without a fight. > Fine! That’s all fair enough. One reader pointed out another, more technical but also quite important answer: It is customary for activist hedge funds that win their proxy fights to be reimbursed by the company.[1] So, because it won, Engine No. 1 probably spent $30 million of Exxon’s money on the proxy fight, not its own. That probably helps. It took a big risk here: If it had lost the proxy fight, it would be out $30 million and wouldn’t have all the fundraising benefit of having taken down Exxon. But because it won, the economics actually look pretty good. > I think the basic reading here is that at a giant public company like Exxon, the managers and board of directors sort of assume that they get to decide who can be on the board, and that shareholders are not really supposed to interfere. Technically this assumption is wrong, and at Exxon last week it did not work out, but you can see why Exxon found it so surprising.
qzw 5y ago
From the point of view of a billionaire, the world probably looks like it’s working exactly as it should.
belatw 5y ago
“ Believe me, Chevron is not an evil company," he added. "I have no compunction — in the least — about owning Chevron. And if we owned the entire business, I would not feel uncomfortable about being in that [industry]." Believe me, if I were a billionaire I too would be defending other billionaires, peasants be damned. Bigly.
hoppyhoppy2 5y ago
Reminds me of a great New Yorker cartoon... https://imgc.allpostersimages.com/img/print/u-g-PGY13F0.jpg https://imgc.allpostersimages.com/img/print/u-g-PGY13F0.jpg
- lazyant 5y ago
  Also https://miro.medium.com/max/4800/1*oC_nqpmMDs5_Blw8WgasRQ.jpeg https://miro.medium.com/max/4800/1*oC_nqpmMDs5_Blw8WgasRQ.jp...
  - kortilla 5y ago
    Neither of which are very intellectually honest. The hard measures required to stop climate change are going to have a strong impact on energy costs which will adversely impact the poor and lower middle class. The New Yorker is wonderfully tone deaf and plays right into its market of people who wouldn’t feel the difference between $3/gal gas and $8/gal gas. These kinds of comics miss the point when people’s actual concerns are about being able to afford their commute or keep their heat on. Until they actually address the tradeoff being proposed, it’s just anti-intellectual Facebook feed bait.
tartoran 5y ago
Wonder how long Buffet has to live and whether it is relevant to take into consideration his opinion at all.
rootsudo 5y ago
Agree, once climate becomes a market inefficiency, profit will reveal itself. First was just general energy and impact, now that we know it's bad, it's environmentally safe energy. The conversation has changed.
- Kim_Bruning 5y ago
  Clearly the market can remain irrational longer than the ecology can remain solvent.
whatshisface 5y ago
When OPEC organizes middle-eastern oil producers to cut production during periods of low prices, it's called a cartel. When hedge funds organize multinational oil producers to cut production during periods of low prices, it's lauded as environmental heroism. I could be too cynical, but this looks like an example of those "our guys are freedom fighters, those guys are armed combatants, their guys are terrorists" things. The proof of their true intentions will come when we see their response to the eventual demand recovery. If they silently re-open the taps, they're working like a cartel. If they keep the taps shut they're honest environmentalists.
ipqk 5y ago
The world will adapt, says 90-year old man.
- leeoniya 5y ago
  it definitely will, after we're mostly extict.
  - exporectomy 5y ago
    Stop spreading this extinction misinformation. Climate change is not expected to cause anything like that for humans. WWII killed 50,000,000 people but then kicked off the most productive period and rapid population growth in all history. To my knowledge, climate change has not been seriously predicted to kill that many people.
    - leeoniya 5y ago
      your comparison is pretty weak. WWII killed only 3% of the world's population - by far not the deadliest event in human history. dinosaurs were around for 165M years. humans have been around for 200k? and we've only been destroying plant and animal ecosystems (on which we depend) at industrial scales for a few hundred years? you seem very confident that we have a bright future because WWII didn't wipe us out 75 years ago and we've been expanding our abuse of resources ever since? i think humans will be around for a while, but not for 10 million years and certainly not at present population levels.
okareaman 5y ago
Both he and his buddy Bill Gates have blind spots you wouldn't expect them to have
- the_af 5y ago
  I'm sure he has them, but which particular blindspots of Bill Gates do you mean?
  - ak_111 5y ago
    For a start "How Bill Gates Impeded Global Access to Covid Vaccines Through his hallowed foundation. The world’s de facto public health czar has been a stalwart defender of monopoly medicine": https://newrepublic.com/article/162000/bill-gates-impeded-global-access-covid-vaccines https://newrepublic.com/article/162000/bill-gates-impeded-gl...
    - alisonkisk 5y ago
      Or maybe it's a blind spot of people who don't understand what motivates corporations to produce work.
  - toomuchtodo 5y ago
    > I'm sure he has them, but which particular blindspots of Bill Gates do you mean? Gates thought Jeff Epstein was a path to a Nobel prize, and it is alleged their relationship contributed to Gates’ divorce. https://www.nytimes.com/2019/10/12/business/jeffrey-epstein-bill-gates.html https://www.nytimes.com/2019/10/12/business/jeffrey-epstein-... https://www.vanityfair.com/style/2021/05/bill-and-melinda-gates-jeffrey-epstein-meetings-sore-spot-divorce https://www.vanityfair.com/style/2021/05/bill-and-melinda-ga... https://www.theguardian.com/technology/2021/may/10/melinda-bill-gates-divorce-jeffrey-epstein-meetings https://www.theguardian.com/technology/2021/may/10/melinda-b... https://www.thedailybeast.com/bill-gates-thought-jeffrey-epstein-was-his-ticket-to-a-nobel-ex-staffer-says https://www.thedailybeast.com/bill-gates-thought-jeffrey-eps...
shmageggy 5y ago
> "I don't think we think we know the answer to all these questions about global warming and so forth. And the people that ask the questions think they know the answers," he said. "We're just more modest." This is absurd almost to the point of gaslighting. Claiming that you as a 97 year old investor know more than an entire field of scientists and calling it modesty? Ridiculous
- exporectomy 5y ago
  Scientists know they don't know either. That's why they have error bars and won't make quantified predictions on human consequences. It's activists who believe the world will end and all that crap.
  - postmeta 5y ago
    They don't make quantified predictions on human consequences of air pollution?
    - exporectomy 5y ago
      No. I was referring to global warming.
- hervature 5y ago
  For other readers, Charlie Munger said that, not Buffett.
- irrational 5y ago
  97 years old means he was born in the mid 1920s. He lived through the Great Depression, WWII, and other stuff. His perspective is probably seeing terrible things happening in the past and then the good times that happen afterwards and projecting that into the future. I don’t know if it is ridiculous or optimistic based upon past experience.
ageek123 5y ago
I don't see how this is a class issue. Everyone who owns an index fund benefits when oil companies are profitable. And when energy prices increase because of moving to more expensive sources, billionaires are much less affected than normal folks. And of course rich people have kids just the same as everyone else, so any climate impact on future generations is no different for the billionaires or the commoner. So it seems misguided to say billionaires as a general class naturally have different opinions on this topic than anyone else. CEOs of oil companies are a different story of course, since their entire livelihood is tied to the industry.
- spaetzleesser 5y ago
  For the rich it will be much easier to deal with the impact of climate change. If sea levels rise, millions of people will have to find new places to live. For rich people this is no problem because they can afford to pay whatever is needed and are welcomed with open arms in most countries as long as they bring some money with them. For poorer people this will be a real problem.
- solveit 5y ago
  > Everyone who owns an index fund benefits when oil companies are profitable. A significant minority of people have nothing in the stock market whatsoever, and of those who do, another large portion are only invested thanks to their pension plan, and so they don't actually know that they own (possibly via index fund) shares in oil companies (and basically every other large company).
  - deleted 5y ago
    [deleted]
  - the_af 5y ago
    > A significant minority of people have nothing in the stock market whatsoever Don't you mean "majority" instead of "minority" there? Most people worldwide (I won't speak for the US, maybe I'm wrong there) don't own anything on any stock market at all.
bob33212 5y ago
After Exxon lost some control to investors, Buffet is trying to prevent the same thing from happening to Berkshire. He isn't crazy to be afraid of activists. Maybe they start with a climate change report request, but where does it end. What if they demand that Berkshire go carbon neutral? It could really hurt the stock, and that would be very depressing for someone who has dedicated their life to making one stock go up to see it falling as they die.
exporectomy 5y ago
Does nobody realize the enormous value of oil? Less investment in it would lead to less production and higher prices. That would push up the price of just about everything. That would primarily hurt the poorest people in the world, pushing some over the edge of survival. The question isn't "Should we use less fossil fuels?". It's "How many people should we kill to reduce the effect of global warming?" The answer is not "as many as it takes" or "zero". It's some difficult balance we don't know.
- jfktrey 5y ago
  Impressive how this completely ignores the effect that oil already has in terms of human cost.
  - exporectomy 5y ago
    It doesn't. What nonsense thinking. Sometime people are probably killed by computers falling on them but computers are still overall good.
- okwubodu 5y ago
  > "How many people should we kill to reduce the effect of global warming?" About 50 would do the job and their names and addresses are public record. They are not poor.
  - solveit 5y ago
    I would like to see less of this kind of content on HN. What a hateful comment.
    - okwubodu 5y ago
      I’m not advocating for violence I’m just emphasizing that those 50 are much more responsible for our climate issue than the global poor. This is entirely in the hands of those that make the decisions. I should have elaborated.
dv_dt 5y ago
This is disappointing, especially from an investor that started with deep insurance ties. He should ask his underwriters about evolving climate risk in their real estate lines of business. Also disappointing because I doubt he would invest in a business with a large overhanging risk of paying much higher costs to operate, yet by this statement he’s helping to tie everyone to high nonabated climate costs
imgabe 5y ago
We should definitely be moving to renewable energy sources as fast as possible, but it's not like we're going to use zero fossil fuels any time soon. People are still going to need to heat their homes, move from one place to another, and all other sorts of things that, for now, require fossil fuels. For those who demand immediate divestiture from all fossil fuel companies, what is your plan to do the things that we currently need these fuels to do? Let people freeze / starve?
- JoshTko 5y ago
  No one is demanding that every single person in the world divest from oil. Most want to remove all oil/gas subsidies and put then towards renewables.
yongjik 5y ago
Shareholder meetings come with all sort of measures proposed by people you've never heard of: many of the proposals may sound good on paper but usually short on specifics. They usually comes with a statement saying something like "The board advises against this measure." Without further specifics, it's unclear what the measure was about. For all I know it could have been a thinly-veiled attempt at corporate power. And starting the article with "The billionaire also offered a full-throated defense of the oil and gas industry." doesn't really help with credibility.
hellbannedguy 5y ago
Why do I feel Warren might be planning to divest from fossil fuel soon? He could always say he changed his mind. To the scientists out there, I don't get this statement, "While Buffett acknowledged that the world is "moving away from" fossil fuels he said "that could change."" 1. Yes--there will always be countries that will use the cheapest form of energy. 2. Is he claiming Golbal Warming do to burning will be debunked?
- hervature 5y ago
  He is saying that technological progress and societal changes might make fossil fuels more popular. This could be carbon capture technologies or a sudden desire to go on cruises because some hip Netflix documentary.
cashsterling 5y ago
We need to stop listening to the ultra wealthy and continue to push hard for action on climate change. When Buffet can solve some differential equations, give a lecture on climate and ecology, or something like that, then I'll consider listening to him.
- doggodaddo78 5y ago
  Climate emergency. We have a very narrow window to do something drastic, or it becomes thermal and ecological runaway.
divbzero 5y ago
The number of Berkshire Hathaway shares held by Warren Buffett are roughly as follows: [1] [2] Class A — 250,000 shares out of 640,000 shares outstanding Class B — 10,000 shares out of 1,330,000,000 shares outstanding Class A shares have 10,000 times the voting power of Class B shares, so Warren Buffett controls just under 33% of voting power overall. If Warren Buffett had abstained, the climate report measure would have still been defeated by the remaining votes against. [1]: https://www.investopedia.com/articles/company-insights/082916/top-5-shareholders-berkshire-hathaway-brka-brkb.asp https://www.investopedia.com/articles/company-insights/08291... [2]: https://www.berkshirehathaway.com/2020ar/202010-k.pdf https://www.berkshirehathaway.com/2020ar/202010-k.pdf
- chrisbolt 5y ago
  Class A shares are also 1500x more expensive than Class B shares. Puts the shares outstanding into a bit more context.
spodek 5y ago
Sad that a person who spoke wisely so many times is tarnishing his legacy with such powerful ignorance. It's tempting to say the world is changing outside his horizon, but he has the resources and potential to understand. No one else can take responsibility for his actions.
- doggodaddo78 5y ago
  It is difficult to get a man to understand something when his [balance and income sheets] depend upon his not understanding it. - Upton Sinclair
tspike 5y ago
> “Believe me, Chevron is not an evil company" If he was just deflecting the activist investors for the sake of preserving his stock value, fine. But to go out on a limb to explicitly defend the ethics of Chevron, that's much tougher to swallow. Their behavior in Ecuador alone is enough to come to a much different conclusion.
jchw 5y ago
If the world doesn’t, the earth sure will. We could be gone in a near instant, and by millions of years it would be like we were never here at all. If we assume Warren Buffett isn’t foolish, I would venture to guess this is exactly what you might say if you are 90 years old and want to keep your investments and status sound through to the final years.
- foobiter 5y ago
  not even millions, 1 would be enough… probably half that even
slibhb 5y ago
> "The company is not adapting to a world where environmental, social, governance (ESG) considerations are becoming much more material to performance," BlackRock Inc., the world's largest asset manager, said after the meeting. This quote says it all. It's expected that companies make certain symbolic gestures because they are seen as "material to performance" not because they make the world better. I don't think these gestures are actually material to performance (and they certainly don't make the world better). I suppose this is a good test.
panax 5y ago
The article misses the point here. BHE (Berkshire Energy) is actually heavily based on wind generation and investing heavily in renewables, more than most utilities in the US. They are basically leaders in this area: https://www.youtube.com/watch?v=tN5pRtFeHEo https://www.youtube.com/watch?v=tN5pRtFeHEo For the climate resolution, listen to Warren's answer on this in 2019: https://www.youtube.com/watch?v=xELxlV0-4yA https://www.youtube.com/watch?v=xELxlV0-4yA They let their business operate fairly independently and want to avoid creating bureaucracy which doesn't create value which is how they generally operate. In Charlie's words: "We're about as good as you can get [in renewables] and you should worry about something else... If this isn't good enough for you we can't help you."
- divbzero 5y ago
  To put another angle on this, approximately 48% of BHE’s generating capacity is renewable [1] compared to approximately 20% of the United States’ overall generating capacity [2]. BHE also publishes environmental reports and emissions data [3] for anyone, including investors, to assess to what degree they are preparing against climate change risk. [1]: https://www.brkenergy.com/energy/ https://www.brkenergy.com/energy/ [2]: https://www.eia.gov/energyexplained/electricity/ https://www.eia.gov/energyexplained/electricity/ [3]: https://www.brkenergy.com/about-us/sustainability.aspx https://www.brkenergy.com/about-us/sustainability.aspx
  - panax 5y ago
    Also Chevron is only a very small part of their portfolio. Another way to look at this is that Berkshire currently only owns $2.4 million of Chevron stock while BHE is investing $18 billion of their own money this year alone to build transmission lines to connect wind generation to populated areas.
- deleted 5y ago
  [deleted]
- postmeta 5y ago
  While Buffett acknowledged that the world is "moving away from" fossil fuels he said "that could change." I wonder what the context of that comment is?

51 points by spenrose 5y ago

Meaningful change is more likely to occur after Buffett and Munger have departed this plane of existence. At 90 and 97 years of age, respectively, no need to hold your breath (based on actuarial tables). Progress on this front is possible (corporate climate change responsibility), and occurring. Check out Engine No 1’s activist success with Exxon within the last week. They pushed for pro climate directors, Blackrock followed (because Blackrock can’t push themselves directly as an indexer), and Exxon lost even after fishing for backpeddlers during the shareholder meeting (which is very much not common or within good taste from a corporate governance perspective). Like a wound, constant pressure must be applied. https://www.cnbc.com/2021/05/26/engine-no-1-gets-at-least-2-candidates-elected-to-exxons-board-in-win-for-the-activist.html https://www.cnbc.com/2021/05/26/engine-no-1-gets-at-least-2-... (Engine No. 1 wins at least 2 Exxon board seats as activist pushes for climate strategy change) https://www.bloomberg.com/opinion/articles/2021-05-27/exxon-lost-a-climate-proxy-fight https://www.bloomberg.com/opinion/articles/2021-05-27/exxon-... (Matt Levine’s take on Exxon)

kortilla 5y ago
But engine no. 1 isn’t even close to a majority vote on the board. It’s not clear anything will change and that may have been a huge waste of money.
- toomuchtodo 5y ago
  The Bloomberg Matt Levine piece covers that. > We talked about the proxy fight yesterday, before the votes were counted. The vote was close, and there were delays, but it looks like Engine No. 1 got at least two of its four director candidates elected to Exxon’s 12-person board. That doesn’t exactly give Engine No. 1 control of Exxon, it doesn’t exactly put Woods’s job in jeopardy, it doesn’t exactly mean that Engine No. 1 can go implement its plans to invest in renewables and become carbon-neutral. It does give Engine No. 1’s directors seats in the boardroom, though, and power to influence Exxon’s strategy. > More important, perhaps, it shows that this can work. Shareholders — even shareholders of Exxon — can do this. If Woods and the other Exxon directors decide to ignore Engine No. 1’s plans, keep doing what they were doing, and stick their fingers in their ears and shout “I can’t hear you” whenever the Engine No. 1 nominees speak at board meetings, then next year Engine No. 1 will run a proxy fight for all of the board seats and win. Exxon’s CEO and directors have to take this shareholder vote seriously, because it proves that the shareholders are willing and able to fire them. You might think that that would be obvious — that the shareholders’ “ownership” of the corporation, and their voting rights, of course meant that they could fire officers and directors whom they didn’t like — but I don’t think it was obvious, and I think in practice it often wasn’t true. Now it is.
  - kortilla 5y ago
    > then next year Engine No. 1 will run a proxy fight for all of the board seats and win That’s a ridiculous assumption.
    - toomuchtodo 5y ago
      Who am I to trust more? Matt Levine, someone with years of equities capital market experience while at Goldman Sachs and who now opines on the capital markets at Bloomberg for a living? Or you? No offense intended, but he is a subject matter expert.
      - kortilla 5y ago
        I would trust Matt, who said it was largely a waste of money and said we will have to see if anything actually happens in the future.
        toomuchtodo 5y ago
        I recommend his most recent post on it. > Well! About a hundred of you emailed me to say that it’s obvious what’s in it for Engine No. 1: publicity. This is a hedge fund that launched six months ago; it runs a small fund and doesn’t have much of a track record. Now it is The Little Engine That Took Down Exxon. It has gone from nothing to being a daring successful activist, and an activist with a halo of environmental virtue. It can fundraise off of that forever, attract lots of money, collect lots of fees, etc. The $30 million of proxy expenses are an investment to make millions more in management fees. > A related benefit is what any activist fund gets from a successful proxy fight: The next company they go after will be intimidated by their Exxon victory, and will try to settle by giving them board seats. You spend $30 million on one proxy fight so you don’t have to spend any money on five more. You show up at a meeting with the next company’s CEO, you put Exxon’s severed head on the table, you say “board seats, now,” and you get them without a fight. > Fine! That’s all fair enough. One reader pointed out another, more technical but also quite important answer: It is customary for activist hedge funds that win their proxy fights to be reimbursed by the company.[1] So, because it won, Engine No. 1 probably spent $30 million of Exxon’s money on the proxy fight, not its own. That probably helps. It took a big risk here: If it had lost the proxy fight, it would be out $30 million and wouldn’t have all the fundraising benefit of having taken down Exxon. But because it won, the economics actually look pretty good. > I think the basic reading here is that at a giant public company like Exxon, the managers and board of directors sort of assume that they get to decide who can be on the board, and that shareholders are not really supposed to interfere. Technically this assumption is wrong, and at Exxon last week it did not work out, but you can see why Exxon found it so surprising.

qzw 5y ago

From the point of view of a billionaire, the world probably looks like it’s working exactly as it should.

belatw 5y ago

“ Believe me, Chevron is not an evil company," he added. "I have no compunction — in the least — about owning Chevron. And if we owned the entire business, I would not feel uncomfortable about being in that [industry]." Believe me, if I were a billionaire I too would be defending other billionaires, peasants be damned. Bigly.

hoppyhoppy2 5y ago

Reminds me of a great New Yorker cartoon... https://imgc.allpostersimages.com/img/print/u-g-PGY13F0.jpg https://imgc.allpostersimages.com/img/print/u-g-PGY13F0.jpg

lazyant 5y ago
Also https://miro.medium.com/max/4800/1*oC_nqpmMDs5_Blw8WgasRQ.jpeg https://miro.medium.com/max/4800/1*oC_nqpmMDs5_Blw8WgasRQ.jp...
- kortilla 5y ago
  Neither of which are very intellectually honest. The hard measures required to stop climate change are going to have a strong impact on energy costs which will adversely impact the poor and lower middle class. The New Yorker is wonderfully tone deaf and plays right into its market of people who wouldn’t feel the difference between $3/gal gas and $8/gal gas. These kinds of comics miss the point when people’s actual concerns are about being able to afford their commute or keep their heat on. Until they actually address the tradeoff being proposed, it’s just anti-intellectual Facebook feed bait.

tartoran 5y ago

Wonder how long Buffet has to live and whether it is relevant to take into consideration his opinion at all.

rootsudo 5y ago

Agree, once climate becomes a market inefficiency, profit will reveal itself. First was just general energy and impact, now that we know it's bad, it's environmentally safe energy. The conversation has changed.

Kim_Bruning 5y ago
Clearly the market can remain irrational longer than the ecology can remain solvent.

whatshisface 5y ago

When OPEC organizes middle-eastern oil producers to cut production during periods of low prices, it's called a cartel. When hedge funds organize multinational oil producers to cut production during periods of low prices, it's lauded as environmental heroism. I could be too cynical, but this looks like an example of those "our guys are freedom fighters, those guys are armed combatants, their guys are terrorists" things. The proof of their true intentions will come when we see their response to the eventual demand recovery. If they silently re-open the taps, they're working like a cartel. If they keep the taps shut they're honest environmentalists.

ipqk 5y ago

The world will adapt, says 90-year old man.

leeoniya 5y ago
it definitely will, after we're mostly extict.
- exporectomy 5y ago
  Stop spreading this extinction misinformation. Climate change is not expected to cause anything like that for humans. WWII killed 50,000,000 people but then kicked off the most productive period and rapid population growth in all history. To my knowledge, climate change has not been seriously predicted to kill that many people.
  - leeoniya 5y ago
    your comparison is pretty weak. WWII killed only 3% of the world's population - by far not the deadliest event in human history. dinosaurs were around for 165M years. humans have been around for 200k? and we've only been destroying plant and animal ecosystems (on which we depend) at industrial scales for a few hundred years? you seem very confident that we have a bright future because WWII didn't wipe us out 75 years ago and we've been expanding our abuse of resources ever since? i think humans will be around for a while, but not for 10 million years and certainly not at present population levels.

okareaman 5y ago

Both he and his buddy Bill Gates have blind spots you wouldn't expect them to have

the_af 5y ago
I'm sure he has them, but which particular blindspots of Bill Gates do you mean?
- ak_111 5y ago
  For a start "How Bill Gates Impeded Global Access to Covid Vaccines Through his hallowed foundation. The world’s de facto public health czar has been a stalwart defender of monopoly medicine": https://newrepublic.com/article/162000/bill-gates-impeded-global-access-covid-vaccines https://newrepublic.com/article/162000/bill-gates-impeded-gl...
  - alisonkisk 5y ago
    Or maybe it's a blind spot of people who don't understand what motivates corporations to produce work.
- toomuchtodo 5y ago
  > I'm sure he has them, but which particular blindspots of Bill Gates do you mean? Gates thought Jeff Epstein was a path to a Nobel prize, and it is alleged their relationship contributed to Gates’ divorce. https://www.nytimes.com/2019/10/12/business/jeffrey-epstein-bill-gates.html https://www.nytimes.com/2019/10/12/business/jeffrey-epstein-... https://www.vanityfair.com/style/2021/05/bill-and-melinda-gates-jeffrey-epstein-meetings-sore-spot-divorce https://www.vanityfair.com/style/2021/05/bill-and-melinda-ga... https://www.theguardian.com/technology/2021/may/10/melinda-bill-gates-divorce-jeffrey-epstein-meetings https://www.theguardian.com/technology/2021/may/10/melinda-b... https://www.thedailybeast.com/bill-gates-thought-jeffrey-epstein-was-his-ticket-to-a-nobel-ex-staffer-says https://www.thedailybeast.com/bill-gates-thought-jeffrey-eps...

shmageggy 5y ago

> "I don't think we think we know the answer to all these questions about global warming and so forth. And the people that ask the questions think they know the answers," he said. "We're just more modest." This is absurd almost to the point of gaslighting. Claiming that you as a 97 year old investor know more than an entire field of scientists and calling it modesty? Ridiculous

exporectomy 5y ago
Scientists know they don't know either. That's why they have error bars and won't make quantified predictions on human consequences. It's activists who believe the world will end and all that crap.
- postmeta 5y ago
  They don't make quantified predictions on human consequences of air pollution?
  - exporectomy 5y ago
    No. I was referring to global warming.
hervature 5y ago
For other readers, Charlie Munger said that, not Buffett.
irrational 5y ago
97 years old means he was born in the mid 1920s. He lived through the Great Depression, WWII, and other stuff. His perspective is probably seeing terrible things happening in the past and then the good times that happen afterwards and projecting that into the future. I don’t know if it is ridiculous or optimistic based upon past experience.

ageek123 5y ago

I don't see how this is a class issue. Everyone who owns an index fund benefits when oil companies are profitable. And when energy prices increase because of moving to more expensive sources, billionaires are much less affected than normal folks. And of course rich people have kids just the same as everyone else, so any climate impact on future generations is no different for the billionaires or the commoner. So it seems misguided to say billionaires as a general class naturally have different opinions on this topic than anyone else. CEOs of oil companies are a different story of course, since their entire livelihood is tied to the industry.

spaetzleesser 5y ago
For the rich it will be much easier to deal with the impact of climate change. If sea levels rise, millions of people will have to find new places to live. For rich people this is no problem because they can afford to pay whatever is needed and are welcomed with open arms in most countries as long as they bring some money with them. For poorer people this will be a real problem.
solveit 5y ago
> Everyone who owns an index fund benefits when oil companies are profitable. A significant minority of people have nothing in the stock market whatsoever, and of those who do, another large portion are only invested thanks to their pension plan, and so they don't actually know that they own (possibly via index fund) shares in oil companies (and basically every other large company).
- deleted 5y ago
  [deleted]
- the_af 5y ago
  > A significant minority of people have nothing in the stock market whatsoever Don't you mean "majority" instead of "minority" there? Most people worldwide (I won't speak for the US, maybe I'm wrong there) don't own anything on any stock market at all.

bob33212 5y ago

After Exxon lost some control to investors, Buffet is trying to prevent the same thing from happening to Berkshire. He isn't crazy to be afraid of activists. Maybe they start with a climate change report request, but where does it end. What if they demand that Berkshire go carbon neutral? It could really hurt the stock, and that would be very depressing for someone who has dedicated their life to making one stock go up to see it falling as they die.

exporectomy 5y ago

Does nobody realize the enormous value of oil? Less investment in it would lead to less production and higher prices. That would push up the price of just about everything. That would primarily hurt the poorest people in the world, pushing some over the edge of survival. The question isn't "Should we use less fossil fuels?". It's "How many people should we kill to reduce the effect of global warming?" The answer is not "as many as it takes" or "zero". It's some difficult balance we don't know.

jfktrey 5y ago
Impressive how this completely ignores the effect that oil already has in terms of human cost.
- exporectomy 5y ago
  It doesn't. What nonsense thinking. Sometime people are probably killed by computers falling on them but computers are still overall good.
okwubodu 5y ago
> "How many people should we kill to reduce the effect of global warming?" About 50 would do the job and their names and addresses are public record. They are not poor.
- solveit 5y ago
  I would like to see less of this kind of content on HN. What a hateful comment.
  - okwubodu 5y ago
    I’m not advocating for violence I’m just emphasizing that those 50 are much more responsible for our climate issue than the global poor. This is entirely in the hands of those that make the decisions. I should have elaborated.

dv_dt 5y ago

This is disappointing, especially from an investor that started with deep insurance ties. He should ask his underwriters about evolving climate risk in their real estate lines of business. Also disappointing because I doubt he would invest in a business with a large overhanging risk of paying much higher costs to operate, yet by this statement he’s helping to tie everyone to high nonabated climate costs

imgabe 5y ago

We should definitely be moving to renewable energy sources as fast as possible, but it's not like we're going to use zero fossil fuels any time soon. People are still going to need to heat their homes, move from one place to another, and all other sorts of things that, for now, require fossil fuels. For those who demand immediate divestiture from all fossil fuel companies, what is your plan to do the things that we currently need these fuels to do? Let people freeze / starve?

JoshTko 5y ago
No one is demanding that every single person in the world divest from oil. Most want to remove all oil/gas subsidies and put then towards renewables.

yongjik 5y ago

Shareholder meetings come with all sort of measures proposed by people you've never heard of: many of the proposals may sound good on paper but usually short on specifics. They usually comes with a statement saying something like "The board advises against this measure." Without further specifics, it's unclear what the measure was about. For all I know it could have been a thinly-veiled attempt at corporate power. And starting the article with "The billionaire also offered a full-throated defense of the oil and gas industry." doesn't really help with credibility.

hellbannedguy 5y ago

Why do I feel Warren might be planning to divest from fossil fuel soon? He could always say he changed his mind. To the scientists out there, I don't get this statement, "While Buffett acknowledged that the world is "moving away from" fossil fuels he said "that could change."" 1. Yes--there will always be countries that will use the cheapest form of energy. 2. Is he claiming Golbal Warming do to burning will be debunked?

hervature 5y ago
He is saying that technological progress and societal changes might make fossil fuels more popular. This could be carbon capture technologies or a sudden desire to go on cruises because some hip Netflix documentary.

cashsterling 5y ago

We need to stop listening to the ultra wealthy and continue to push hard for action on climate change. When Buffet can solve some differential equations, give a lecture on climate and ecology, or something like that, then I'll consider listening to him.

doggodaddo78 5y ago
Climate emergency. We have a very narrow window to do something drastic, or it becomes thermal and ecological runaway.

divbzero 5y ago

The number of Berkshire Hathaway shares held by Warren Buffett are roughly as follows: [1] [2] Class A — 250,000 shares out of 640,000 shares outstanding Class B — 10,000 shares out of 1,330,000,000 shares outstanding Class A shares have 10,000 times the voting power of Class B shares, so Warren Buffett controls just under 33% of voting power overall. If Warren Buffett had abstained, the climate report measure would have still been defeated by the remaining votes against. [1]: https://www.investopedia.com/articles/company-insights/082916/top-5-shareholders-berkshire-hathaway-brka-brkb.asp https://www.investopedia.com/articles/company-insights/08291... [2]: https://www.berkshirehathaway.com/2020ar/202010-k.pdf https://www.berkshirehathaway.com/2020ar/202010-k.pdf

chrisbolt 5y ago
Class A shares are also 1500x more expensive than Class B shares. Puts the shares outstanding into a bit more context.

spodek 5y ago

Sad that a person who spoke wisely so many times is tarnishing his legacy with such powerful ignorance. It's tempting to say the world is changing outside his horizon, but he has the resources and potential to understand. No one else can take responsibility for his actions.

doggodaddo78 5y ago
It is difficult to get a man to understand something when his [balance and income sheets] depend upon his not understanding it. - Upton Sinclair

tspike 5y ago

> “Believe me, Chevron is not an evil company" If he was just deflecting the activist investors for the sake of preserving his stock value, fine. But to go out on a limb to explicitly defend the ethics of Chevron, that's much tougher to swallow. Their behavior in Ecuador alone is enough to come to a much different conclusion.

jchw 5y ago

If the world doesn’t, the earth sure will. We could be gone in a near instant, and by millions of years it would be like we were never here at all. If we assume Warren Buffett isn’t foolish, I would venture to guess this is exactly what you might say if you are 90 years old and want to keep your investments and status sound through to the final years.

foobiter 5y ago
not even millions, 1 would be enough… probably half that even

slibhb 5y ago

> "The company is not adapting to a world where environmental, social, governance (ESG) considerations are becoming much more material to performance," BlackRock Inc., the world's largest asset manager, said after the meeting. This quote says it all. It's expected that companies make certain symbolic gestures because they are seen as "material to performance" not because they make the world better. I don't think these gestures are actually material to performance (and they certainly don't make the world better). I suppose this is a good test.

panax 5y ago

The article misses the point here. BHE (Berkshire Energy) is actually heavily based on wind generation and investing heavily in renewables, more than most utilities in the US. They are basically leaders in this area: https://www.youtube.com/watch?v=tN5pRtFeHEo https://www.youtube.com/watch?v=tN5pRtFeHEo For the climate resolution, listen to Warren's answer on this in 2019: https://www.youtube.com/watch?v=xELxlV0-4yA https://www.youtube.com/watch?v=xELxlV0-4yA They let their business operate fairly independently and want to avoid creating bureaucracy which doesn't create value which is how they generally operate. In Charlie's words: "We're about as good as you can get [in renewables] and you should worry about something else... If this isn't good enough for you we can't help you."

divbzero 5y ago
To put another angle on this, approximately 48% of BHE’s generating capacity is renewable [1] compared to approximately 20% of the United States’ overall generating capacity [2]. BHE also publishes environmental reports and emissions data [3] for anyone, including investors, to assess to what degree they are preparing against climate change risk. [1]: https://www.brkenergy.com/energy/ https://www.brkenergy.com/energy/ [2]: https://www.eia.gov/energyexplained/electricity/ https://www.eia.gov/energyexplained/electricity/ [3]: https://www.brkenergy.com/about-us/sustainability.aspx https://www.brkenergy.com/about-us/sustainability.aspx
- panax 5y ago
  Also Chevron is only a very small part of their portfolio. Another way to look at this is that Berkshire currently only owns $2.4 million of Chevron stock while BHE is investing $18 billion of their own money this year alone to build transmission lines to connect wind generation to populated areas.
deleted 5y ago
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postmeta 5y ago
While Buffett acknowledged that the world is "moving away from" fossil fuels he said "that could change." I wonder what the context of that comment is?