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Warren Buffett Faces Renewed Climate Change Challenge by Investors

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Warren Buffett Faces Renewed Climate Change Challenge by Investors

Traders involved about local weather change have developed an efficient playbook for getting corporations to set extra bold targets for decreasing greenhouse gasoline emissions by pressuring, shaming and cajoling executives.

However these ways usually are not engaged on Warren Buffett and his Berkshire Hathaway conglomerate, which owns power corporations, a railway, insurance coverage corporations and different companies that pump big quantities of carbon dioxide into the environment. As Mr. Buffett holds out, critics complain that Berkshire’s companies are doing much less to chop emissions than comparable corporations.

Mr. Buffett has repeatedly resisted shareholders who need Berkshire to offer detailed local weather disclosures that embody the entire firm, not simply elements of it, and spend extra on sustainability. His stand could appear odd to some folks, provided that he has at instances backed progressive causes, together with increased taxes on the rich. He has additionally pledged to provide away practically all his wealth, and has given billions to causes embraced by the left.

Mr. Buffett has argued that subsidiaries like Berkshire Hathaway Vitality disclose loads of details about their emissions and are spending billions of {dollars} on renewable power.

“I don’t assume they learn our annual stories,” Mr. Buffett mentioned eventually 12 months’s assembly, referring to the shareholder group.

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Berkshire and its power subsidiary declined to remark for this text.

Regardless of Mr. Buffett’s insistence that his companies are doing so much to battle local weather change, the corporate’s power subsidiary particularly has set weaker targets for carbon emissions than different utility corporations like Duke Vitality and Dominion Vitality.

“They’re lagging behind their friends,” mentioned Dan Bakal, a senior program director at Ceres, a nonprofit group that works with buyers and firms on environmental points.

The confrontation between local weather activists and Mr. Buffett is more likely to flare once more subsequent weekend at Berkshire’s annual gathering — a folksy affair also known as “Woodstock for capitalists.” Shareholders will vote on a proposal from the dissident buyers that asks Berkshire to overtake the way it views local weather dangers and take different environmental measures.

The proposal, like the same one final 12 months, shouldn’t be binding and is more likely to be defeated as a result of Mr. Buffett holds particular shares that give him extra votes than different shareholders.

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However the vote tally might nonetheless be embarrassing to Mr. Buffett if it alerts that almost all shareholders disagree with him.

The activist buyers contend that their proposal final 12 months received majority assist among the many many shareholders, together with giant funding corporations like BlackRock, Vanguard and State Avenue, that aren’t a part of a Berkshire inside circle made up of Mr. Buffett and other people and entities he has longstanding ties to.

Some analysts who observe the corporate say they aren’t shocked Mr. Buffett is against the local weather change proposal as a result of they’ve lengthy felt that Berkshire doesn’t disclose sufficient particulars about its company empire.

“That is only a continuation of a company model — and a company model that’s changing into antiquated,” mentioned Cathy Seifert, an analyst at CFRA Analysis who follows Berkshire. “And I believe we’re going to see simply how antiquated with the shareholder vote.”

The activist buyers mentioned that if Mr. Buffett was set in his methods, so have been they. Their playbook is effectively honed and comparatively simple. First, they attempt to compel corporations to carefully estimate and disclose their carbon emissions below the precept that you would be able to’t enhance what you don’t measure. As soon as corporations know roughly how a lot carbon they’re releasing, activists strain them to launch a plan to chop emissions over the medium and long run. Firms can then be judged towards these plans, and extra strain could be utilized when companies fail to satisfy targets.

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To this point, the activists are caught on the first stage with Mr. Buffett — Berkshire doesn’t disclose its complete emissions throughout its companies, although some subsidiaries, like Berkshire Hathaway Vitality, present some info. Others, like its insurance coverage companies, which spend money on corporations which will produce and eat fossil fuels, present only a few particulars about their impression on the planet.

As corporations take measures to develop into greener, they’ve pledged to chop emissions from their very own operations and the facility crops from which they purchase electrical energy. Some go even additional and intend to cut back the carbon footprint of their suppliers and prospects, referred to as Scope 3 emissions.

The gold customary of local weather commitments is to get to “internet zero” — which implies that an organization is not emitting greenhouse gases general, together with any from its provide chain and use of its merchandise by prospects. Many companies hope to get to that time by switching to renewable power and discovering methods — like tree planting and direct seize of carbon from the air — to offset any carbon dioxide they’re nonetheless emitting.

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As extra corporations publish particulars of their emissions and plans, it’s changing into simpler to check companies.

Local weather Motion 100+, an investor-backed group that tracks local weather commitments of the biggest company emitters, mentioned that final 12 months Berkshire Hathaway failed to satisfy any of the group’s standards. It discovered that different large U.S. corporations met or partly met at the least a few of its standards.

For instance, three giant electrical utilities — Duke, Dominion and Xcel Vitality — goal to cut back some Scope 3 emissions. However Berkshire Hathaway Vitality has not publicly pledged to cut back Scope 3 emissions.

“Each Duke and Dominion are actually main power corporations on this entrance,” mentioned Danielle Fugere, president of As You Sow, the shareholder advocacy group that represented buyers on current shareholder proposals on local weather change at these corporations. The proposals have been withdrawn after the businesses revamped their local weather plans.

On attending to internet zero, Berkshire Hathaway Vitality makes use of looser language than different utilities, saying it’s “striving to attain internet zero greenhouse gasoline emissions by 2050 in a fashion our prospects can afford, our regulators will permit and know-how advances assist.” Xcel Vitality and Duke Vitality have mentioned they’re dedicated to reaching internet zero carbon emissions by 2050.

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Since internet zero goal dates are many years away — normally 2050 — many buyers additionally need corporations to set interim targets. By 2030, Berkshire Hathaway Vitality goals to have halved its greenhouse gasoline emissions from 2005 ranges, in response to Berkshire’s newest annual report. Over the identical interval, Xcel Vitality plans an 80 p.c discount in emissions from its electrical energy operations.

“It’s a step in the precise course,” Mr. Bakal of Ceres mentioned of Berkshire Hathaway Vitality’s interim goal, “however it isn’t anyplace close to what the main corporations are doing.”

Berkshire might quickly have to supply the kind of fuller local weather disclosures the dissident shareholders need. The Securities and Alternate Fee has proposed a rule requiring public corporations to do standardized local weather reporting. However the rule would most definitely face authorized challenges and could possibly be watered down or struck down by the courts.

The insurgent Berkshire shareholders embrace the California Public Staff’ Retirement System and a New Jersey pension fund, they usually can in all probability once more rely on the assist of BlackRock, Vanguard and State Avenue, the index mutual fund giants.

Berkshire is preventing again, saying the shareholder group’s assertion that it received a majority final 12 months amongst exterior shareholders was “incorrect,” however the firm has refused to disclose detailed vote tallies that may again up its declare.

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One potential wild card is how the Invoice & Melinda Gates Basis votes its giant block of Berkshire shares, which Mr. Buffett donated to the nonprofit over years. Mr. Gates could be anticipated to again Mr. Buffett, a longstanding pal, in a tough shareholder vote. However Mr. Gates has made addressing local weather change a precedence lately.

The Berkshire shares held by the Invoice & Melinda Gates Basis Belief are managed by Cascade Funding. Representatives for the inspiration and Cascade declined to remark.

Whereas the activists are annoyed by Mr. Buffett’s refusal to accede to their calls for, they argue that their strain has made an impression. For instance, Berkshire’s newest annual report has a piece written by Greg Abel, who heads Berkshire Hathaway Vitality, that particulars among the subsidiary’s climate-related efforts.

Even so, the activists say they’ll maintain urgent Mr. Buffett to launch complete local weather disclosures and threat assessments for your entire conglomerate.

“They’ve $130 billion of money,” mentioned Timothy Youmans, an government at EOS at Federated Hermes in North America, which is a sponsor of the local weather proposal that Berkshire shareholders will vote on. “Spend some cash, please, and convey this all collectively.”

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Disney faces class action lawsuit over employee data breach

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Disney faces class action lawsuit over employee data breach

Walt Disney Co. has been hit with a class action lawsuit accusing the Burbank-based entertainment giant of negligence, breach of implied contract and other misconduct in connection with a massive data breach that occurred earlier this year.

Plaintiff Scott Margel submitted the complaint on Thursday in Los Angeles County Superior Court against Disney and Disney California Adventure. The 32-page document also accuses the company of violating privacy laws by not doing enough to prevent or notify victims of the extent of the leak.

The class members, estimated to number in the thousands, are described in the complaint as individuals who gave “highly sensitive personal information” to Disney in connection with their employment at the company — information that was allegedly compromised in the breach.

Representatives of Disney did not immediately respond Friday to The Times’ request for comment.

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The lawsuit cites an article published in September by the Wall Street Journal, which reported that a hacking group known as NullBulge publicly released data spanning more than 18,800 spreadsheets, 13,000 PDFs and 44 million internal messages sent via the workplace communication platform Slack.

According to the Journal, the compromised Slack messages contained sensitive information belonging to Disney cruise employees, including passport numbers, visa details, birthplaces and physical addresses; at least one spreadsheet listed the names, addresses and phone numbers of some Disney Cruise Line passengers. The publication later reported that Disney planned to stop using Slack after the breach.

The plaintiff and class members “remain, even today, in the dark regarding which particular data was stolen, the particular malware used, and what steps are being taken, if any, to secure their [personal information] going forward,” the complaint reads.

The plaintiff and class members “are, thus, left to speculate as to where their [data] ended up, who has used it and for what potentially nefarious purposes.”

In July, NullBulge said that it had leaked roughly 1.2 terabytes of Disney data in rebuke of the company’s treatment of artists, “approach to AI” and “pretty blatant disregard for the consumer.” The self-proclaimed hacktivists told CNN that they were able to penetrate Disney’s system thanks to “a man with Slack access who had cookies.”

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A Disney spokesperson said in a statement at the time that the company was “investigating this matter.”

Margel is demanding that Disney take steps to reinforce its security system and educate class members about the risks associated with the breach. The plaintiff is also seeking unspecified damages and a jury trial.

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Rivian cuts production forecast, citing supply chain issue; its stock dips

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Rivian cuts production forecast, citing supply chain issue; its stock dips

Electric vehicle maker Rivian saw its shares dip Friday after the Irvine-based company cut its production targets amid ongoing supply issues.

Citing a shortage of a component used to build its electric pickups, sport utility vehicles and vans, Rivian said production could drop as much as 18% this year at its lone U.S. assembly plant.

Rivian did not specify the part that is in low supply but noted that the shortage has become more acute in recent weeks.

The company now forecasts its full-year production will be between 47,000 and 49,000 vehicles, down from an earlier estimate of 57,000. During the most recent quarter, Rivian produced 13,157 vehicles and delivered 10,018, falling short of analysts’ expectations.

Shares of Rivian ended the day at $10.44, down 3.2%. The company’s stock has been battered since the start of the year, falling by more than 50% amid underwhelming financial reports. In the second quarter this year, Rivian posted a net loss of $1.46 billion compared with a loss of about $1.12 billion during the same period a year earlier. The company is scheduled to announce its third-quarter earnings next month.

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Rivian received a lifeline in June when Volkswagen agreed to a massive investment in the company that is expected to total $5 billion. Rivan has nonetheless continued to struggle in the face of dropping demand for electric vehicles and other supply chain issues that forced the company to pause its production of commercial vans for Amazon.com in August.

Early this year, the automaker announced a 10% cut in its workforce that sent stocks plummeting 25% in one day. The pool of interested wealthy buyers who don’t already own an electric vehicle is shrinking, analysts said, while the broader market weighs the advantages and feasibility of switching to electric.

The average car buyer is not likely to be able to afford a Rivian vehicle, and concerns remain about charging infrastructure and the distance vehicles can drive on a single charge. Rivian’s R1T electric pickup truck starts at around $70,000; its R1S SUV starts at nearly $75,000.

With sleek design and outdoorsy features, Rivian’s vehicles garnered much attention from analysts and attracted investors such as Amazon and Volkswagen. The company exceeded expectations during its initial public offering of stock in 2021, ending its first day of trading valued at nearly $88 billion.

The production issues announced this week could get in the way of Rivian’s goal of achieving positive gross profits by the fourth quarter of this year. According to analysts, the company’s gross margins are expected to remain in negative territory in the final three months of 2024.

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As Starbucks CEO, Howard Schultz violated labor law with barb at Long Beach barista, labor board finds

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As Starbucks CEO, Howard Schultz violated labor law with barb at Long Beach barista, labor board finds

In April 2022, a Starbucks barista and union organizer was invited to meet with the company’s upper management in Long Beach. During the meeting, the employee raised several concerns, including charges of unfair labor practices the company faced.

Howard Schultz, who had just begun his third stint as the company’s chief executive, became irritated and shot back: “If you’re not happy at Starbucks, you can go work for another company.”

Now, the National Labor Relations Board has found that Schultz acted unlawfully by inviting an employee to quit after they raised issues related to unionization.

The board’s decision, issued Oct. 2, ordered Starbucks to cease and desist from implying employees could be fired for engaging in protected activities such as union organizing. The company must also post a notice of employee rights at all of the Long Beach stores from which employees attended the meeting with Schultz.

In its decision, the board wrote that it has “long held unlawful employers’ statements that employees dissatisfied with working conditions should quit rather than try to improve them through union activity.”

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Starbucks did not immediately respond to a request for comment regarding the NLRB’s Long Beach decision, which comes as the coffee chain has changed its stance on unionization efforts.

Until this year, the company had ardently resisted the campaign to organize its workers, which began in 2021. Federal labor regulators found Starbucks repeatedly violated labor laws by disciplining and firing workers involved in unionizing activity, shutting down stores and stalling contract negotiations.

But in February the company announced it had agreed with the union behind the campaign, Starbucks Workers United, to streamline negotiations on contracts and take a more neutral approach when workers at unionized stores took steps to organize.

Earlier this week, the unionization drive reached a milestone, when a store in Washington became the 500th U.S. location to unionize. Starbucks Workers United has credited the company’s new posture for a wave of some 100 Starbucks stores that have unionized since March.

The Starbucks Workers United logo appears on the shirt of a person attending a hearing in Washington on March 29, 2023.

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(J. Scott Applewhite / Associated Press)

“We’re happy to see the NLRB continue to stand up for workers and our legal right to organize. At the same time, we’re focused on the future and are proud to be charting a new path with the company,” Michelle Eisen, national organizing committee co-chair at Starbucks Workers United and a barista at a Buffalo, N.Y., store, said in an emailed statement about the decision on Schultz’s comment.

Starbucks spokesperson Phil Gee said the company disagreed with the decision, and that sessions such as the one held with baristas in Long Beach and other locations across the country aimed to gather input from workers.

“Our focus continues to be on training and supporting our managers to ensure respect of our partners’ rights to organize and on progressing negotiations towards ratified store contracts this year,” Gee said in emailed statement Friday.

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Beyond charges from federal regulators and other fallout from its earlier anti-union approach, the company is grappling with a change in leadership, softening demand, boycotts over its perceived support for Israel, pressures from activist investors and criticism that it has strayed far from its roots with menus of overly complicated items that take too long to serve. Sales in North American stores dipped 2%, and sales in the rest of the world dipped 7%, the company reported in July.

Schultz stepped down last year and in August the company named a new chief executive, Brian Niccol, to replace Schultz’s successor. Niccol has said he’ll stick with the company’s new position on unions.

“I deeply respect the right of partners to choose, through a fair and democratic process, to be represented by a union,” Niccol wrote in a letter addressed to union members and posted on the company’s website last week. “I am committed to making sure we engage constructively and in good faith with the union and the partners it represents.”

Niccol penned the remarks in response to a letter signed by hundreds of workers who serve as bargaining delegates from various stores for the union. The workers reached out ahead of a scheduled bargaining session, the first of Niccol’s tenure.

Still, workers’ views on whether to unionize is not unanimous.

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As employees at the store in Washington were voting to join the union, workers at a Starbucks in Hollywood on Monday chose not to join. Also on that day, a store in Salt Lake City failed to secure votes needed to win union recognition.

The NLRB has conducted a total of 602 union elections at Starbucks stores, with 102 of them falling short and 500 passing, according to NLRB spokesperson Kayla Blado. In California, 61 stores have held union elections and 41 of them have had their bargaining units recognized by the labor board.

At the Hollywood store, pro-union workers had been optimistic ahead of the vote count, which came out 14 opposed to unionization to 6 favoring it. The workers had reached out to union officials in February, frustrated by problems of chronic understaffing.

Mikey Martinez, a shift supervisor who has worked at the store for more than five years, said he was fearful when he and co-workers began talking about unionizing. But his initial concerns about backlash dissipated after managers held a meeting about a month ago to explain the company’s new, more neutral stance.

It was “really good to be able to speak about it without checking behind our shoulders to see if anyone is listening,” Martinez said.

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