World Economic Forum chairman criticizes Warren Buffett

Klaus Schwab, founder and executive chairman of the world economic forum, said on Wednesday that he wanted to have a good talk with Warren Buffett, a US billionaire investor.

Mr. Schwab said Mr. Buffett’s focus on shareholder profitability over social issues such as climate change could one day backfire.

Mr. Buffett said last year that companies should focus on creating shareholder value rather than investing in social causes such as climate change. “It’s shareholder money,” he said.

But Schwab said companies should strike a balance between profits, people and the planet. If given the opportunity, he said, he would tell Buffett: “you see, since you have a large exposure in the insurance industry, why don’t you actively participate in more ESG (environmental, social and Governance) responsibilities, because it may one day have a counterproductive effect on your insurance business.”

Mr. Schwab said Mr. Buffett “may be in trouble for not having a comprehensive policy that is both profitable and human and earth oriented.” Berkshire Hathaway (410152.93, 7063.93, 1.75%) operated by Warren Buffett is a holding company whose core business is insurance.

Schwab, the author of stakeholder capitalism: a global economy for progress, people and the planet, spoke at a forum.

“Many business managers blame the government for distributing taxpayers’ money, but they enthusiastically support their own distribution of shareholders’ money,” Mr. Buffett said earlier when talking about corporate spending on social issues such as climate change

Mr. Buffett has invested about $30 billion in wind turbines and related infrastructure in Iowa, but he says it’s just for tax credits.

Schwab said that “the art of good management today” is to create a balance between shareholders and stakeholders, as well as in society as a whole. Companies that don’t agree with the stakeholder concept will be “on the wrong side of history,” he said.

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