Warren Buffett puzzles many about green energy: what about heir apparent Greg Abel?

Greg Abel, Warren Buffett’s likely successor as CEO of Berkshire Hathaway, led the company’s move toward renewables as head of Berkshire’s large utility business. for a conglomerate whose exposure to so many sectors means it wants to try clean energy while maintaining its interests in the fossil fuel industries.

Vice President Charlie Munger indicated at the Berkshire Hathaway BRK.B, + 1.54% BRK.A, + 1.82% annual meeting on Saturday that Abel, 59, will eventually rise to the top. Buffett, 90, confirmed it himself in a weekend comment to CNBC. “The directors agree that if something happened to me tonight, it would be Greg who would take over tomorrow morning,” he said. Opinion: Berkshire Hathaway After Buffett: Who Will Be CEO, What Else Will Change And What Will Not. Edward Jones analyst Jim Shanahan told the Associated Press that Abel provides confidence to stock watchers. Abel’s workload to date pushed him to the top. If BHE, a $ 630 billion division of Berkshire Hathaway, were an independent public company, it would likely be worth more than $ 50 billion, Barron’s reports. “I think he has proven to be a really effective leader,” said Shanahan, adding that Abel handled questions about Berkshire’s efforts to respond well to climate change at the annual meeting. Abel has been with Buffett for more than two decades, most recently leading Berkshire Hathaway Energy. That division includes utilities focused subsidiaries from the Midwest and West. Include coal, gas pipelines, hydroelectric, wind, solar, geothermal and nuclear power in the mix. A $ 10 billion bet on liquefied natural gas emerged as recently as 2020. Buffett, Abel and their team have backed the largest solar project in the US. However, count Berkshire Hathaway as one of the most criticized companies. by the influential investment group Climate Action 100+. It leaned on metrics linked to emissions, governance and disclosures and considers Berkshire Hathaway in nearby PetroChina company PTR, + 1.30%, the listed arm of China’s state energy interests, when it comes to the lack of transparency of climate change. Related: $ 54 Trillion Global Investors Tell Companies They Commit To Net Zero Emissions To Showcase Their Work. Abel, for his part, has emphasized spending on a renewable future. “If you look at our investment through the end of 2020, we’ve invested $ 30 billion, or more than $ 30 billion, in renewable energy, and we’ve really completely changed the way our businesses do business, that is, our businesses of public services “, said. “They have been decarbonizing and delivering a valuable product to our stakeholders, to our customers.” Buffett, whose vision still captures investors’ imaginations, has certainly embraced clean energy, but on a slower timeline. It is a pace that has been argued that the size of the shift demands. “Our country’s power companies need a massive makeover in which the final costs will be staggering,” he said in the recent letter to shareholders. “Historically, the long-prevailing coal-based electricity generation was located near large population centers. However, the best sites for the new world of wind and solar generation are often in remote areas. “And Buffett made clear in that letter that he sees the slower transition to renewables as the realistic path.” Thousands had to be invested. of millions of dollars before significant revenue flowed in, “he said.” Transmission lines had to cross the borders of states and other jurisdictions, each with its own rules and constituencies. BHE would also need to deal with hundreds of owners of lands and executing complicated contracts both with suppliers that generated renewable energy and with distant utilities that would distribute electricity to their customers. Competing interests and defenders of the old order, along with unrealistic visionaries who wanted an instantaneously new world , they had to be incorporated “. The phrase “unrealistic visionaries” sounds like a shot at the most aggressive calls for the United States to catch up with Europe and elsewhere on the net zero emissions path to slow global warming by the 1.5 degrees set in the Paris climate pact, even from a Democrat like Buffett. The Biden administration has an ambitious strategy to cut the country’s greenhouse gas emissions by roughly half by 2030. Of the dozen of the nation’s largest electricity producers that also have local utilities, Berkshire Hathaway Energy is one of the few that have not announced plans to reach net zero emissions, or at least close to that benchmark, by mid-century. Read: Warren Buffett still believes Berkshire Hathaway shares are cheap enough to buy Berkshire has again urged shareholders this spring to reject a call for further weather-related disclosures, saying he did not believe an analysis of its risks was “necessary”. The freedom to make such a call for now comes as the Securities and Exchange Commission is reviewing stepping up stricter weather disclosures. Owning one-third of Buffett’s stock means he can essentially block a proxy. Still, increased shareholder pressure on climate change and other sustainability issues is not expected to diminish once Abel takes over. BlackRock BLK, + 0.77%, the $ 8 trillion investment giant, has urged the companies it participates in to do more about the climate and “sensitive social and political issues.” It owns almost 5% of Berkshire. And California‘s giant public pension fund CalPERs has said that Berkshire’s size and the prestige of its leadership will not prevent it from demanding climate risk disclosure. “Shareholders said that the fact that resolutions got about a quarter of the vote was significant, as it was twice what similar resolutions got last year,” said David Callaway, writing for Callaway Climate Insights. “But given the support of CalPERs and BlackRock in the resolutions, I would have expected better.”