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NYC Comptroller Ask Berkshire Hathaway, Major Insurance Companies To Break Away From Coal Investments

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NYC Comptroller Ask Berkshire Hathaway, Major Insurance Companies To Break Away From Coal Investments

New York Comptroller Scott Stringer, representing NYC pension funds, has asked Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) and two other major insurance companies to divest from the coal industry.

What Happened

Stringer released a statement last week calling for the need to protect clients from the damage caused by climate change and reminded Berkshire Hathaway, American International Group Inc. (NYSE: AIG) and Liberty Mutual Fund of their responsibilities toward shareholder value. The comptroller asked these companies to stop underwriting coal projects and divest from the industry.

The NYC comptroller revealed that he had sent letters on behalf of New York City Employees’ Retirement System, Teachers' Retirement System of the City of New York and New York City Board of Education Retirement System, to executives of the three major insurance companies asking them to take “immediate action” to end all business ties with the coal industry. 

Stringer said, “Divesting from the coal industry is the right thing to do for our planet, our future, and our children – and it’s the smart thing to do for investors and shareholders.”

Why It Matters

According to Stringer’s statement, Berkshire Hathaway, AIG, and Liberty Mutual Insurance held $6.7 billion in coal investments as of 2017, while coal accounts for 40% of global carbon emissions.

Stringer serves as a custodian, a trustee and an investment advisor to the New York City Pension Funds

In his statement, the comptroller alleged that while 19 insurance and reinsurance companies such as Swiss Re, Zurich Insurance Group AG (OTC: ZURVY), Chubb Ltd (NSYE: CB), and Axis Capital Holdings Limited (NYSE: AXS) have committed to some form of divestment from the coal industry, the three offending companies have “continued to support the coal industry to various degrees.”

A Liberty Mutual Spokesperson told Bloomberg that the company is taking action to reduce its carbon emissions, and environmental sustainability is a “key focus.”

Berkshire Hathaway is strongly invested in coal with its electric power company PacifiCorp operating a number of power plants and Burlington Northern Railroad involved in the transport of coal.

Last year PacifiCorp had planned to close most of its coal-fired plants by 2038, with 16 out of 24 plants closing by 2030. 

 

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