Berkshire Chairman and Chief Executive Warren Buffett said in his annual letter to shareholders Saturday that it's "highly likely" that climate change poses a major threat to the planet.
He said he stopped short of saying he was "certain" because he said he's not an expert.
"It would be foolish, however, for me or anyone to demand 100 percent proof of huge forthcoming damage to the world if that outcome seemed at all possible and if prompt action had even a small chance of thwarting the danger," he said.
Shareholders, Buffett said, will be asked at this year's annual meeting to consider voting their proxies for a measure that would require the company to discuss climate change, how such activities might present a risk to the company's insurance operation and explain how the company is responding to such threats.
Buffett said the sponsor of the proxy proposal believes Berkshire is "especially threatened by climate change because we are a huge insurer, covering all sorts of risks."
But Buffett said insurance policies are customarily written for one year — not 10 or 20 at fixed prices. That means that they can be repriced annually to "reflect changing exposures."
In other words, if it's more likely that a particular policy will be exposed to possible effects from climate change — from a hurricane, for instance — then that policy can be priced accordingly, meaning more premium income.
The effect, then, would be to make Berkshire larger and more profitable, not the other way around.
"As a citizen, you may understandably find climate change keeping you up nights," Buffett said. "As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries."