Warren Buffett, Berkshire Hathaway CEO, owns many businesses exposed to climate change risks, from utilities to insurance companies. Here is how the billionaire investor thinks about investing in the era of global warming and extreme weather.
Warren Buffett, chairman and CEO of Berkshire Hathaway, is for many people the first source to consult when it comes to the development of an investing philosophy. The billionaire investor has has never shied away from sharing his views with the public, either — and not only when it comes to stock market value. Issues of politics, social policy, ethics and simply making money the right way are themes that Buffett has returned to many times.
Berkshire Hathaway Energy, Buffett's large utility conglomerate, owns western utility PacifiCorp, which has a sizable fleet of coal power plants. Berkshire's Burlington Northern railroad ships a lot of coal, too. But the Berkshire utility company also is one of the biggest wind energy producers in the U.S.
Shareholders of Berkshire Hathaway — an entire generation of Americans who have been made wealthy by Buffett's investing genius — should consider his words on the issue and how well-protected their stock holding will be into the future. For most of his life Buffett has taken a provincial view of investing, focused almost exclusively on the U.S., and in that sense, many of the changes being wrought by climate change around the globe may not directly bear on his holdings. But right now, Buffett's home state of Nebraska is experiencing record flooding. Omaha, his lifelong hometown, which averages less than an inch of rain in all of March, already has had over 2 inches of rain this month.
A year later Munger had more to say about shareholder proposals:"We're asked, as a corporation, to take a public stance on very complicated issues. We've got crime in the cities. We've got 100 — we've got 1,000 — complicated issues that are very material to our civilization. And if we spend our time in the meeting taking public stands on all of them, I think it would be quite counterproductive.
Berkshire's insurance subsidiary Geico took its single-largest loss in history from Superstorm Sandy, a $490 million loss due to claims on more than 46,000 flooded vehicles. Other insurance companies have created models for climate change. Buffett simply does not see it. The very next year, in 2017, category 4 Hurricane Irma made landfall in Florida. In 2018, Hurricane Michael, another category 4 storm, made landfall in Florida, and that was the first year that two category 4-plus storms had made landfall in the continental U.S. within a single hurricane season.
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