Berkshire Hathaway’s AGM Will See an Increasing ESG Presence: Morningstar Look Ahead

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Lindsey Stewart, director of investment stewardship research at Morningstar, delves into what we can expect to see through an ESG lens.

“The number of shareholder resolutions on ESG themes at Berkshire Hathaway continues to grow: there are six this year, up from four in 2023. This year there are three resolutions on climate-related risk oversight, making a total of nine in the last four years. This year’s climate proposals request disclosure on achieving Paris Agreement alignment in Berkshire Hathaway’s investment and insurance activities, and on GHG emissions at Berkshire Hathaway Energy; one further proposal by an ‘anti-ESG’ proponent requests information on a scenario in which Berkshire Hathaway Energy reduces the speed of its shift to renewable energy sources.

It’s worth noting that the six ‘pro-ESG’ climate proposals at Berkshire Hathaway in the previous three years have all been backed by at least one-third of the company’s independent shareholders; four of them were supported by more than half. (However, none of these resolutions passed due to directors’ significant control of the company through a multiple-class share structure.)

It’s also the fourth year in a row that Berkshire Hathaway is being asked to report on the effectiveness of it’s diversity, equity and inclusion efforts. In the three previous years, these resolutions have also been well-supported by the company’s independent shareholders, but support has dropped each year: from 55% in 2021 to 49% in 2022, to 42% last year. This year’s vote will be a useful indicator of shareholders’ propensity to continue supporting such proposals.”

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