2021: Why does Berkshire oppose disclosing climate-related risks?

BECKY QUICK: This one comes from Cristina Gallegos, who’s been a shareholder since 2018. And she says, “On items two and three of the proxy materials, the board recommended voting ‘Against’ on the shareholder proposal regarding the reporting of climate-related risks and opportunities, as well as on the shareholder proposal regarding diversity and inclusion reporting.

“Berkshire is such a force for good when it comes to financial literacy and empowerment through wealth creation. Why not be a force for good and an example when it comes to these very two important — two very important issues? Please share with us more about the ‘Against’ recommendation.”

WARREN BUFFETT: Well, I think maybe Greg can talk a little bit about what Berkshire has done, as opposed to — in terms of the environmental.

I would say this. It’s very interesting. With everything that’s being — I think we have over a million shareholders. I mean you can’t be 100% sure because of street name and duplicate accounts and all that sort. But it certainly seems very, very likely.

I’ve had — and I get the letters that are written to me. I don’t think I’ve had — I don’t think I’ve had three letters in the last year or anything from shareholders.

Now, I have them — and our vote on this, as you’ll see later, is that, overwhelmingly, the people that bought Berkshire with their own money voted against those propositions. Most of the votes for it were by — came from people who’ve never put a dime of their own money into Berkshire. (Laughs)

And so, they — and I don’t think they’ve read our annual reports. And I don’t think they’ve read the reports of Berkshire Hathaway Energy. And I don’t think they know. You know, if I talk about what we’re doing in high voltage transmission, we’re doing more than any company in the country.

The president talked about what the government’s going to do, and how important it is, and, you know.

We have a record in that’s, overall, is incredibly good.

But we have a group of organizations, just generally, and they’re nice people. But they want us to answer a bunch of questionnaires their way, so they want us to go to Dairy Queen and Borsheims, and all those people, and have them fill out reports that show a bunch of figures.

But the reports that count are the reports that Greg gets on Berkshire Hathaway Energy and the railroad (BNSF). You talk about three of our companies, and you’ve covered 95% of it.

And it’s asinine, frankly, in my view. Now, we do some other asinine things, because we’re required to do them. So, we’ll do whatever’s required.

But to have the people at, you know, Business Wire, you know, Dairy Queen, all these places, filling out reports to make up some common report that comes in — we don’t do that stuff at Berkshire.

We’ve got — during the pandemic, we probably have about 12 people who come into headquarters. And we’ve got, you know, 360,000 people working in a company that — all kinds of diverse activities.

And it’s built — I don’t want to get in the whole thing of it. But it’s built on autonomy.

And I am probably the only CEO of an S&P 500 company that does not get a consolidated income statement every month. I mean every other company, I’ll bet, in the S&P 500, prints out the earnings they had at the end, you know, from February and March, and CEO gets and a whole bunch of other people get it.

I don’t get it. I don’t need it (laughs), you know.

And I can put 60 or 70 companies to a whole lot of trouble and everything. And they’d hand me something, and I know the answer to it already, and it doesn’t make any difference. I mean they’ve got the money they need.

So, we don’t do things just because we’ve got a department of this or a department of that. And we don’t want to set up a lot of departments like that.

And what’s important is what we’re doing in the — well, primarily at Berkshire Hathaway Energy and the railroad. I mean that’s — and I’ll let Greg tell you about that in just one second. But the —

CHARLIE MUNGER: Warren, I don’t think we think we know the answer to all these questions about global warming and so forth. And the people who ask the questions think they know the answers. We’re just more modest.

WARREN BUFFETT: Well, but even if we knew the answer, I mean, in terms of what we — the reports we would —

CHARLIE MUNGER: Yeah.

WARREN BUFFETT: —we would not collect a whole lot of things that don’t mean anything to us —

CHARLIE MUNGER: No.

WARREN BUFFETT: — to satisfy people who actually don’t own any stock themselves and, in many cases, I can tell they haven’t read our annual report, even.

You know, we, as I point out in the annual report, and I never — nobody would have guessed this. People think we’re a bunch of guys that own stocks and all that sort of thing.

Berkshire Hathaway owns, by GAAP accounting, more property plant equipment, business infrastructure — which the president just got through talking about Wednesday night — infrastructure, the importance of it — we have, measured by GAAP accounting, more than any other company in the United States.

We have more than any of those companies that are on the list of the largest companies in the country, but we — and we’ve got it by a substantial margin.

So, we have an investment in what makes this country move and work. Fifteen percent of the interstate goods move on our railroad. We’re building transmission.

And we started, in 2006 or ’07, planning how we would close coal plants, but —

You can’t close coal plants until you get the electricity from where it’s generated to the customer. And if you’re going to generate it in Wyoming, and it’s going to go to Las Vegas or someplace, and previously they had a coal plant near the place, because that was the way it was done 50 years ago or 75 years ago, you’d better have the transmission. There’s no sense having the wind blow in Wyoming and people turn around and turn on the lights in Las Vegas.

So, we went at the transmission plan question a lot earlier than people were talking about it. And we’ve done — we said 16 billion or whatever it was in the annual report that we — underway. And we just added 2 billion since the annual report came out. And there’s no utility in the country that’s coming anywhere close to that. Tell them a little bit about it.