Warren Buffet Stymies Shareholders’ GHG Emissions Reduction Planning
Berkshire Hathaway shareholders reject a measure that would have required the company’s utilities to set goals for reducing greenhouse gas emissions. At the company’s annual meeting Saturday several people spoke in favor of the measure, saying Warren Buffett’s company could be hurt financially by potential liabilities associated with carbon emissions, reports abcnews.com.
Berkshire owns several utilities through its MidAmerican Energy Holdings subsidiary, but Buffett dismissed the issues, saying that he doesn’t believe greenhouse gases represent a material risk for Berkshire’s insurance operations. Buffett and Berkshire’s board, which collectively controls 38 percent of the voting power, opposed the measure, and it was overwhelmingly rejected.
The bulk of Berkshire Hathaway earnings come from insurance, writes investment site Morningstar.com, but of the more than 70 non-insurance businesses in its portfolio, MidAmerican is one of the two largest contributors to Berkshire’s operating earnings; Berkshire has maintained a 90% stake since adding the company to its holdings in 2005. (The other core business is railroad Burlington Northern Santa Fe.)
The MidAmerican Energy Holdings Company company website, said that the group supplies a mix of fuel resources including geothermal, natural gas, hydroelectric, nuclear, coal and wind. Its operating revenue in 2010 was $11.1 billion, distributing 118 billion kilowatt-hours of electricity, and supplying 1.88 billion dekatherms of natural gas to 6.9 million customers.
According to the Wall Street Journal, Q1 2011 first-quarter profit at Berkshire Hathaway Inc. fell 58% to $1.51 billion, driven by costly disasters that hurt the company’s insurance operations, while operating earnings, which exclude some investment results, fell 28% to $1.59 billion. However, the company’s regulated businesses, the segment that includes recently acquired railroad Burlington Northern Santa Fe and the MidAmerican power company, saw profit rise 80% to $908 million.
Despite the overwhelming influence of the “Oracle of Omaha,” it is not unheard of for shareholders to move forward with their own agenda. For example, shareholder advocacy group As You Sow actively participates in shareholder dialogues and resolutions in order to move companies towards greater environmental sustainability and social equity.
As You Sow filed shareholder resolutions last month with Procter & Gamble (P&G) and General Mills to adopt Extended Producer Responsibility (EPR) programs. Resolutions with General Mills were filed on April 13, 2011, and with P&G on the April 26, 2011, the group reports. The move is intended to pressure the CPGs to start collecting and recycling product packaging in their U.S. operations. As You Sow says the shareholder resolution is the first to be filed by shareholders on this issue.
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