Warren Buffett’s Berkshire Hathaway Inc. is opposing two shareholder proposals related to climate change and diversity, citing the unique structure of the sprawling conglomerate.

While the company’s board acknowledged that it needs to responsibly manage climate risks and maintain a diverse and inclusive workforce, it said that Berkshire, which owns companies ranging from railroad BNSF to auto insurer Geico and retailer See’s Candies, operates on a decentralized basis, with each firm free to deal with the issues in a way that’s best for its business and industry.

“There are few centralized or integrated business functions. We want our managers to do the right things and we give them enormous latitude to do that,” Berkshire said in its proxy filing Monday about a climate proposal submitted by California Public Employees’ Retirement System, Federated Hermes Inc. and Caisse de Depot et Placement du Quebec. “Consistent with our business model, each subsidiary is independently responsible for identifying and managing the risks and opportunities associated with their business, including those related to climate change.”

Buffett, for decades, has embraced Berkshire’s decentralized set-up, employing just 26 people at corporate headquarters for a conglomerate that’s valued at roughly US$590 billion. The board also pushed back against a diversity and inclusion proposal from As You Sow, working on behalf of Handlery Hotels Inc., saying that their request for quantitative, comparable data to determine the effectiveness of Berkshire’s diversity and inclusion programs “improperly” suggests that there’s standardized data for all of Berkshire’s 60-plus operating businesses.

‘Dissimilar Operations’

“Berkshire’s operating businesses represent dissimilar industries operating in multiple locations throughout the world,” the company said in the filing. “It would be unreasonable to ask for uniform, quantitative reporting for the purposes of comparing such dissimilar operations in different geographic locations.”

Buffett’s compensation for 2020, also disclosed in the filing, was up just 1.5 per cent from a year earlier. Both Buffett and Charlie Munger, his longtime business partner and a Berkshire vice chairman, have each received US$100,000 in annual salaries for more than 25 years. Buffett’s key deputies, Greg Abel and Ajit Jain, each received a pay bump of just US$250 from 2019, with each making more than US$19 million a year.

Buffett, chairman and chief executive officer of Berkshire, has routinely faced shareholder proposals urging more disclosures related to the environment. The company shot down an attempt in 2016 to get a more detailed report on climate-change risk for its insurance subsidiaries.

Still, Berkshire’s proxy for its annual meeting, scheduled as a virtual event on May 1, details why the company has faith in its decentralized approach to large issues. Buffett’s conglomerate cited the work at its energy operation to increase its investment in renewables, and BNSF’s efforts to develop new technologies that could lower fuel usage and cut carbon emissions.

“Through their evaluations of climate-related risks and opportunities, Berkshire businesses may determine it is advantageous to publicly commit to reducing their emissions,” Berkshire said in the filing. “Other Berkshire businesses are making similar decisions that make great sense for the environment and Berkshire’s economics. These decisions are determined by their respective management teams and not as a result of an edict or requirement mandated by Berkshire’s corporate management team,” which is leading to “great results.”