Ahead of the meeting, EOS filed, on behalf of a client, a climate change reporting shareholder proposal co-sponsored by Caisse de dépôt et placement du Québec (CDPQ), California Public Employees’ Retirement System (CalPERS) and the State of New Jersey Common Pension Fund D. The proposal calls for Berkshire Hathaway to publish a parent-company annual assessment of climate physical and transitional risks. A similar proposal was filed in 2021, which EOS at Federated Hermes believes garnered a majority of non-insider votes.
While Berkshire Hathaway currently publishes certain information on the sustainability of its operating companies, the proposal calls for climate related financial disclosures at the parent company level in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), including:
- Climate-related financial reporting where material for subsidiaries and for the parent company
- How the board oversees climate-related risks for the combined enterprise
- The feasibility of the parent company, and its subsidiaries, establishing science-based, greenhouse gas reduction targets, consistent with limiting climate change to well-below two degrees
EOS has asserted that the publication of such an assessment would enable shareholders to more effectively assess portfolio risks and to engage with Berkshire Hathaway on its climate change risks and opportunities.
Proxy advisors ISS and Glass Lewis have for the second year in a row recommended that shareholders vote in favour of this climate risk reporting shareholder proposal, which is item 3 on the Berkshire Hathaway 2022 annual meeting ballot.
In addition to the call for more climate disclosures, EOS will also be calling for Berkshire Hathaway’s audit committee, to explain why climate change was not addressed again this year in the company’s audit, when it has been specifically outlined in the latest 10-K filing.
Timothy Youmans, Engagement Lead – North America, EOS at Federated Hermes: “Climate change and the transition to a low-carbon economy pose critical risks to investors and climate risk disclosure from Berkshire Hathaway at the parent company level is necessary to provide shareholders with a complete and comparable picture of the climate-related financial risks that the company is facing. Not only would these disclosures better equip shareholders to assess the climate risks of their portfolio holdings, but we firmly believe it would also be in the best interest of the long-term success and sustainability of the company.”
EOS is working on behalf of pension funds and other large, institutional investors, representing assets under advice of US$1.6 trillion as of 31 March 2022.