Jonathan Stempel and Carolina Mandl

OMAHA, Neb. (Reuters) – Warren Buffett faces pressure to improve Berkshire Hathaway’s (NYSE:) Inc environmental and social policies, as well as its governance. Buffett meets with shareholders in this meeting. Investors believe it is a harbinger for what might come after Buffett leaves.

Calpers and other investors, which is the biggest U.S. pension fund, demand that Berkshire create an independent chair for Buffett’s replacement and reveal more information about its many businesses, including how they promote diversity, address climate risk, and reduce greenhouse gas emissions. Buffett will remain the chief executive officer.

They may be unlikely to achieve success until Buffett takes over. Buffett is now 91.

“In a postBuffett world, we might start to see a stronger shareholder base agitating towards greater change,” stated Cathy Seifert of CFRA Research New York. “At this stage, Warren Buffett has a lot of respect.”

These proposals were supported by Institutional Shareholder Services (a prominent proxy advisory firm), and some investors such as Neuberger Berman and Norges Bank Investment Management.

Berkshire has been resisting the changes for a long time.

Buffett does not have to create one-size-fits all reporting requirements. It claims that its insurance and namesake energy already address investors’ concerns.

Buffett stated last May that it was “absinine” for Berkshire to request reports from its dozens of smaller businesses.

Berkshire said, “After Buffett leaves, someone should take over the chair of the company. But Buffett must retain the chairman and CEO positions.”

Because Buffett has nearly one-third the voting power in Berkshire, it is likely that these proposals will be defeated. Similar propositions on climate risk and diversity were supported by less than 30% last year.

At the conclusion of Berkshire’s annual meeting shareholders will be able to vote. After Charlie Munger, the Vice Chairman, answers shareholder questions.

Greg Abel (59), who will replace Buffett’s chief executive, would be available to answer shareholder questions. Ajit Jain (70), will be also on the ground.

REVERENCE

There are two sides to the Berkshire investor base.

Buffett is a long-standing icon for smaller investors as well. Many of these have stayed with Buffett for decades. Others say Buffett needs no change.

Bill Smead is the founder of Smead Capital Management, and has been a Berkshire shareholder since 2005. He noted that Berkshire Hathaway Energy already spends heavily on cleaner fuels, in order to reduce greenhouse gas emissions.

Smead stated that spending $3.9 billion in Iowa on solar and wind energy is enough to inform anyone who cares about climate change about Berkshire.

After a significant drop in returns in 2019, 2020, and 2021 respectively, shareholders have been calling for changes.

Berkshire shares rose 10% on Wednesday and fell 12% through Wednesday as investors look for growth stocks to provide value.

Timothy Youmans is the engagement lead for North America in, Federated Hermes’ (NYSE:), North America arm. He acknowledged Saturday’s defeat as unlikely, despite having had four years worth of talks with Berkshire.

He is still hopeful for change and cites Abel’s comments in Berkshire’s most recent annual report on Berkshire’s sustainability efforts.

Youmans indicated that Abel appeared to have an excellent grasp on climate change risk. We are hopeful that he will be able to implement the climate reporting at parent company levels we have requested.

Mohnish Pabrai, principal at Pabrai investment Funds, and a Berkshire shareholder for many years, described the demand for increased reporting as a distraction.

He said that corporations should “focus on their mission of taking care shareholders, employees, customers” He projected that Berkshire is well-positioned for “the next 100 years.”