Our Fifteen Minutes of Live-Streamed Fame Inside the Berkshire Hathaway 2016 Annual Shareholders Meeting
by Matt Gregory
NFP State Board Treasurer
It was a rainy and blustery day outside the CenturyLink Center in Omaha when I met up with the group that would eventually go inside the Berkshire Hathaway Shareholders Meeting to present Nebraska Peace Foundation’s resolution on climate change.
We had a brief respite from the rain as BOLD Nebraska and Nebraskans for Peace held a rally outside and speeches were given by BOLD’s Jane Kleeb, NFP’s Tim Rinne and renowned climate scientist Dr. James Hansen, who was going to be one of the presenters of the resolution. Decked out in raincoats and ponchos, we waved colorful signs with arks and animals on them, playing on Warren Buffett’s “Noah’s Law” comment in his annual shareholder letter regarding the threat of climate change: “If an ark may be essential for survival, begin building it today, no matter how cloudless the skies appear.”
After the speeches and the shareholder passes were handed out, Dr. Hansen led us inside the arena. Many of Berkshire Hathaway’s 62 subsidiaries were in attendance including Coca Cola, Phillips 66, Suncor Energy, BNSF, Fruit of the Loom, MidAmerican Energy, Kinder Morgan and GEICO. The event known as the “Woodstock of Capitalism” had everything from a walkthrough of a private jet to BNSF train sets and toys to the Oscar Meyer Wiener Mobile with a companion giant Heinz ketchup bottle to boot.
We listened to Buffett and Charlie Munger field questions for an hour, and then gathered at the section where we would be making the presentation on the shareholder resolution during the business meeting. Nebraska Peace Foundation Treasurer Mark Vasina quickly explained the intent of the resolution before turning the microphone over to,Dr. Hansen. In beseeching Buffett’s support for a carbon fee, Dr. Hansen made a plea to our humanity. “We are now close to a point of handing young people a situation that will be out of control, with ice sheet disintegration and multi-meter sea level rise during the lifetime of today’s young people, which would mean loss of coastal cities and economic devastation,” he warned. “Sea level rise would be irreversible on any time scale of interest to humanity.”
Buffett shakily responded, “Although we may differ on specifics… I don’t think you and I have any difference in the fact that [climate change] is important. We are on the course that you think is certain and I think it’s probable… The issue before the shareholders is not how I feel about whether climate change is real or whether a carbon tax is appropriate. It’s whether it poses a risk to our insurance business. We don’t write policies for a long period of time…” he said.
Buffett’s attempt to deflect discussion about climate change then led to an exchange with Jim Jones, Executive Director of the Katie School of Insurance at Illinois State University, about hidden risks associated with climate change, which include stranded assets and long-term liability risks.
“These customers are looking for long-term interests being protected by their reinsurer,” Jones said. He also said that reinsurers like Berkshire’s companies are destroying relationships with primary insurers when they perceive Berkshire’s “reinsurance as being just one-year contracts that can be re-priced or withdrawn.”
To this, Buffett retorted “We have not been asked ever to my knowledge to write long-term contracts. Our primary insurers know that we look at it [risk] one year at a time and we will not write business that we think has a major negative probability. And they don’t expect us to write it.”
Next up was Jane Kleeb who reminded Buffett that they had met years before, at the home of former Nebraska Senator Ben Nelson during the fight for health care reform. She recalled that he’d given her some sage advice: polling numbers matter and apply public pressure. Kleeb then pleaded for him to support renewable energy and stop blocking rooftop solar in Nevada.
Two other shareholders spoke, both in favor of the resolution, and the last speaker was Richard Miller, Professor of Systemic Theology at Creighton University, who warned that we ignore acting on climate change at our peril. “We need to do something and we need massive transformation immediately.”
To raucous applause, Charlie Munger finally put a stop to the discussion, channeling the American climate denier psyche in his exasperation that what we talk about when we talk about climate change is reducing consumption of fossil fuels instead of geo-engineering “possibilities.” What Munger did not note was that these untested “possibilities” could themselves create a whole host of problems for the ecosystem—and that they would be extremely expensive.
To no one’s surprise, the resolution was resoundingly defeated; it got only 13 percent of the vote. But for the Nebraska Peace Foundation (and by extension Nebraskans for Peace), it was a victory. For fifteen minutes, the oldest statewide peace and justice organization in the U.S. had the undivided attention of some of the richest and most powerful men in the world and forced them to consider acting on climate change. It was clear that they did not appreciate having to have that conversation and evaded a lot of our points. But thousands of shareholders around the world (via live-streaming) also heard our appeal and it’s yet to be seen what the impact will be.
Warren Buffett did not promise to lead a global effort to shift the world community off of carbon fuels. But, thanks to the shareholder resolution, he said more about climate change than he ever has before. The world’s most legendary investor and third-richest person not only publicly and repeatedly acknowledged the peril climate change represents, he listened attentively to the remarks of Dr. James Hansen (as did the world’s richest person and fellow Berkshire Hathaway director, Bill Gates) and publicly engaged with each of the seven people who spoke in support of the resolution.
For perhaps the first time ever in his life, Warren Buffett heard the unvarnished science about the already occurring reality of climate change and the stark warning, from Dr. Hansen, of what the near future holds. Buffett’s comment that “In the long term, I think that climate change is a terribly important problem for civilization” is clearly progress, but well short of the leadership the world needs from him.
As for the Nebraska Peace Foundation and Nebraskans for Peace, no other event in our 46-year-long our history has brought us this level of national—and international—attention. The entire Shareholder Meeting was live-streamed worldwide on Yahoo, and NFP (or the Foundation) received coverage about the shareholder resolution in the Omaha World-Herald (where both Mr. Buffett and Dr. Hansen got their starts), NET Radio, Bloomberg News/Business Week, Inside Climate News, The Guardian, Huffington Post, and the insurance industry trade magazine Carrier Management.
This entire chain of events was made possible by the state board of Nebraskans for Peace who appealed to the Nebraska Peace Foundation to purchase an A-class share of BH stock; by the Foundation board of directors who elected to make the stock purchase; by former NFP President and Foundation Treasurer Mark Vasina who conceived of the topic of the shareholder resolution and drafted the language; by Dr. James Hansen who consented to come to Omaha for the shareholder meeting; by Creighton University Professor Richard Miller and the Creighton University administration for their help in arranging Dr. Hansen’s public presentation; by Jane Kleeb and BOLD Nebraska for all their logistical and media efforts calling upon Buffett to build the ‘Climate Ark’; and by the folks at Ceres, the Boston-based investor advocacy group promoting action on climate risk. Ceres provided critical advice and assistance and recruited insurance expert Jim Jones of Illinois State University to speak. But the bulk of the thanks goes to the NFP State Board who, in January 2014, first got the ball rolling. It was visionary work that will be hard to top.