Berkshire Hathaway Board Rejects Calls to Divest Stock Holdings

The Berkshire Hathaway company, headed by the Warren Buffet, the “Oracle of Omaha,” has rejected calls by one of its stockholders to divest the company of fossil fuels, urging stockholders to vote against the measure at the scheduled annual meeting in May.

In a regulatory filing submitted to the SEC on Friday, the Board of Directors pointed out that the traditional energy holdings that the company does hold stock in conforms to the highest safety standards, and voluntarily complies with extra scrutiny for methane emissions. The Board concluded that “Berkshire should not limit its universe of potential investments based upon complex social and moral issues.”

Berkshire Hathaway certainly has not ignored green energy, as the company is currently involved in solar, wind, geothermal, and hydro projects across 9 states, all of which will produce 4,083 megawatts (MW) of renewable power once fully operational. That is power output equivalent to 68 coal plants.

Berkshire Hathaway, which has been entrusted by tens of thousands of small investors as a stable way to invest money, is an example of how companies can responsibly manage the interests of investors and the need for environmental stewardship. Given that numerous studies show that pension funds and college endowments tend to suffer as a result of divestment measures, serious thought should be given to whether divestment is more of a publicity stunt than an effective strategy to help the environment.

Berkshire Hathaway is not alone with this opposition to, and critiques of, divestment.  There are myriad other examples for how private companies, government authorities and other universities can constructively engage in addressing environmental challenges while rejecting divestment. Stanford University rejected calls to divest from fossil fuels, instead choosing to engage in a radical overhaul of the campus in its quest to reduce the institution’s environmental footprint. In Oakland, California, John Speakman, trustee of the Oakland fire and police pensions system, PFRS, warned that the burdens from shortfalls from divestment could land on the taxpayer if enacted. Oregon state treasurer Ted Wheeler wrote that divestment was “not the right strategy” for the state’s pension system. Vermont’s state treasurer Beth Pearce rejected divestment of the state’s pension funds, stating that “markets now offer meaningful tools to address climate risk.”

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