Warren Buffett Is One of the World’s Richest Fossil-Fuel Billionaires
The 10 largest fortunes with links to greenhouse gas emissions are valued at $537 billion.
Berkshire Hathaway’s annual shareholder meeting is a quaint and wholesome corporate custom. Thousands of Warren Buffett superfans listen to the 89-year-old investor, maybe sample Dairy Queen ice cream, and watch Bill Gates play bridge. These days, the traditional pilgrimage to Omaha is also likely to turn up sharp-edged climate debates.
At last year’s meeting, Buffett and Berkshire executives were asked to defend how the company scored on environmental metrics. In 2016, the Nebraska Peace Foundation called on Berkshire to disclose how climate change will affect its insurance subsidiaries.
Asking uncomfortable questions of the Berkshire Hathaway team makes sense: Bloomberg estimates that the Sage of Omaha's $89 billion fortune is the world’s third-biggest with links to significant levels of greenhouse gas emissions (see methodology).
The face of the genial Buffett is not the one normally conjured by the image of petroleum plutocrats, and the two entries above his in Bloomberg’s ranking of the 10 largest fortunes connected to emissions are less surprising: the Koch family, followed by the House of Saud. What does it mean to reconsider Buffett’s fortune as more alike than different from these empires of fossil fuel?
Buffett’s conglomerate—largely because of its energy and transport units, which contributed about 40% of Berkshire's pretax income in 2018—was directly and indirectly responsible for 189 million tons of greenhouse gas emissions in 2018, according to estimates by CDP, which works to increase environmental disclosure and action among companies, cities, states, and regions. Berkshire’s emissions are equivalent to the consumption of 21 billion gallons of gasoline, or 24 trillion smartphones being charged. Berkshire Hathaway didn't respond to requests for comment.
The conglomerate’s planetary impact is about the same as those of cement maker LafargeHolcim. While that’s a fraction of the biggest emitters—just 20 fossil fuel companies can be linked to more than one-third of all greenhouse gas emissions in the modern era—Berkshire’s presence is a reminder that emissions aren’t just the responsibility of such usual suspects as Exxon Mobil or Royal Dutch Shell.
From avocados to shower soap, the carbon economy is embedded—visibly or invisibly—everywhere in our daily lives. “There’s not a single sector that I can think of that is not going to be impacted in some way or another,” says Bruno Sarda, president of CDP North America. “We often talk about things like energy and materials, or cement or oil and gas, but when you look across food, apparel, consumer goods, even financial services, every sector is being either held accountable or, in some cases, disrupted.”
To be eligible for this list, more than 50% of a fortune valued by the Bloomberg Billionaires Index must be derived from an entity (or its holding company) that's listed on one of three rankings of emitting companies, which were selected by Bloomberg to encompass a range of public and private companies. The sources, which rely on reported and estimated data, comprise:
• A CDP ranking of the top 200 corporate emitters from the MSCI AWI, a major global index
• Climate Accountability Institute’s Carbon Majors ranking
• The University of Massachusetts’s Greenhouse 100 Polluters list
All told, the 10 fortunes on this ranking had a combined net worth of $537 billion at the end of 2019, according to an analysis by Bloomberg. The Koch family, whose industrial empire includes oil refineries and chemicals companies, tops the chart with $150 billion—up $75 billion in the past eight years. The House of Saud, in second place, has holdings of at least $100 billion built atop Saudi Arabia’s oil wealth. India’s Mukesh Ambani, with holdings in oil refining, comes in fourth, behind Buffett, after seeing his net worth more than double during the past decade.
The surging wealth is a reminder of how little the economy has changed, despite increasingly urgent calls for action. The combined wealth of these billionaires is about 9 times the net worth held by the 10 richest clean energy billionaires, according to Bloomberg research.
But while some on the list are digging in—the Koch family, for example, continues to fund politicians who resist climate change action—there are plenty of signs that the status quo is shifting, thanks in part to many of those on this very list.
Volkswagen is targeting becoming carbon emission free by 2050, with planned investments and development costs in areas such as hybridisation, electric cars and digitisation expected to total roughly 60 billion euros between 2020 and 2024. Oil giant Lukoil saw the total amount of electricity it generated from renewable sources in 2018 increase by 30% compared to 2017, while its total investments in renewable sources in 2018 increased five-fold compared to a year earlier. Sustainability is a strategic priority for Fiat Chrysler, which expects to reduce carbon dioxide emissions by 25-30% between 2018 and 2024 across its four major regions.
Buffett’s impact, too, is shifting. Renewables made up 40% of Berkshire Hathaway Energy’s power capacity at the end of 2018.
When pressed at last year’s annual meeting, Buffett highlighted that his utility was moving toward a renewable future in Iowa, one of its biggest markets. “We will have that 100%,” he said.
Koch family
$150bn
Koch Industries
United States
Diversified
House of Saud
$100bn
Saudi Aramco
Saudi Arabia
Oil
Warren Buffett
$89.3bn
Berkshire Hathaway
United States
Diversified
Mukesh Ambani
$58.6bn
Reliance Industries
India
Oil refining
Leonid Mikhelson, Gennady Timchenko
$42.7bn
Novatek
Russia
Natural gas
Vagit Alekperov, Leonid Fedun
$31.4bn
Lukoil
Russia
Oil
Duncan family
$26.8bn
Enterprise Products
United States
Oil
Porsche/Piech family
$13.6bn
Volkswagen
Germany
Autos
Lakshmi Mittal
$13.2bn
ArcelorMittal
India
Steel
Agnelli family
$11.1bn
Fiat Chrysler
Italy
Autos
Methodology
Net worth figures—reflecting the entrant's total net worth rather than an amount that can be credited to emissions—are as of Dec. 31, 2019 and are based on calculations by the Bloomberg Billionaires Index. To qualify, the majority of a fortune valued by Bloomberg must be derived from an entity (or its holding company) that's listed on one of three rankings of emitting companies, which were selected to encompass a range of public and private companies: a CDP analysis of the top 200 corporate emitters from the MSCI ACWI, a major global index, using both reported and estimated data as well as Climate Accountability Institute’s Carbon Majors ranking and the University of Massachusetts’ Greenhouse 100 Polluters list. Billionaires or the families whose fortunes are connected to such companies are ranked by their net worth.
With assistance from Pei Yi Mak, Tom Maloney, Alex Sazonov, Jack Witzig and Katherine Chiglinsky
Photography: Getty