Wednesday, 19 June 2024

Are billionaires doing enough to save the planet?

5 min read

By Richard Hartung

The United Nations (UN) Emissions Gap report states that the richest 1% account for 15% of the global greenhouse gas (GHG) emissions. The world’s richest have amassed more wealth than ever and as a consequence, expanded their carbon footprint. It is therefore crucial to take stock and ask if those with financial resources are actually facilitating the pragmatic shift towards a sustainable planet.

  • Billionaires account for more of the carbon emissions that cause climate change than anyone else.
  • Most billionaires like Warren Buffet and Larry Ellison still focus on profits rather than protecting the planet.
  • 80% of billionaires on the Green Billionaires list hail from China.

Climate change is “the biggest threat to security that modern humans have ever faced,” naturalist David Attenborough told the UN last year, and UN Secretary-General Antonio Guterres echoed his remarks by calling the climate emergency “the defining issue of our time”. That crisis is in part fuelled by the world’s top billionaires, who produce more of the carbon emissions that cause climate change than almost anyone else.

Billionaires affect the climate the most

The UN reported that annual per capita emissions of the top 0.1% of the wealthy are several hundred times greater than the average of the poorest half of the global population. A study led by Indiana University researcher Beatriz Barros similarly found that the super-rich have carbon footprint that can be thousands of times higher than those of average citizens. The ways billionaires spend their wealth on private aeroplanes, luxurious yachts, and multiple palatial dwellings have an outsized effect on the commons.

Billionaires continue to focus on profit

Despite the gravity of the threat from climate change, many top billionaires are resisting change or, at best, taking a passive approach. When Berkshire Hathaway shareholders introduced a proposal in 2015 to create a report on the risk that climate change posed, billionaire CEO Warren Buffett responded by saying “climate change has not produced more frequent nor more costly hurricanes nor other weather-related events covered by insurance. If super-cats (super-catastrophic events) become costlier and more frequent, the likely effect on Berkshire’s insurance business would be to make it more profitable. When you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.” When shareholders proposed in 2021 that Berkshire Hathaway publish an annual assessment of how it manages climate-related risks, the board opposed the proposal and reiterated Buffet’s statement from 2015 by noting that he “did not believe climate change was a major threat to Berkshire’s insurance operations.”

The board of Oracle, chaired by billionaire Larry Ellison, similarly opposed a shareholder proposal to create a board-level committee on sustainability. Luxury goods maker LVMH’s chairman Bernard Arnault has held press conferences about his company’s efforts to reduce its environmental impact. At a press conference in 2019, Bloomberg reported that Arnault reacted to climate activist Greta Thunberg by saying she is “a dynamic young girl, but she’s surrendering completely to catastrophism. I find that her views are demoralising for young people.” Arnault’s remarks came two days after Thunberg told UN leaders that “we are at the beginning of a mass extinction and all you can talk about is money and fairy tales of endless economic growth,”

While other billionaires including Larry Paige, Mark Zuckerberg, Sergey Brin and Steve Ballmer have made mild statements about their concerns around climate change, they have done relatively little to promote sustainability. Ballmer shifted from issuing memos such as “Investing in Environmental Sustainability” when he was CEO at Microsoft to relative silence about climate change until he partnered with non-profit Aspiration to help get environmental approval for a new sports facility for his beloved basketball team in California. 

80% of billionaires on the Green Billionaires list hail from China

Two types of billionaires are, however, making a difference in mitigating climate change. Given the extent of their resources and visibility, their actions can make a huge difference. One group is CEOs who have become wealthy by leading companies that provide solutions to climate change. The best known is Elon Musk, whose success with Tesla reduced greenhouse gas emissions from automobiles and spurred other carmakers to start making electric vehicles. His solar firm, Tesla Energy, is a leader in solar panels as well as battery production, which helps to reduce emissions from power plants.  

Yet Musk is not the only one. While Chinese billionaires haven’t made it into the top 10 yet, Bloomberg noted that 80% of the billionaires on its Green Billionaires list come from China and tycoons who make electric vehicles or batteries dominate. Zeng Yuqun is the 28th wealthiest person on the Bloomberg Index and made his money leading electronic vehicle (EV) battery maker CATL. The products these billionaires and others created leverage technological innovation to mitigate climate change.

The other group is billionaires who have retired. While Jeff Bezos seemed relatively complacent about climate change during most of his time as CEO of Amazon he has more recently taken a different approach and is using his wealth to mitigate climate change. He pledged $10 billion to the Bezos Earth Fund and has promised to give the money to worthy climate initiatives.

And retired Microsoft CEO Bill Gates is heavily involved in mitigating climate change. He committed $2 billion towards efforts to tackle climate change during the Conference of the Parties in Paris in 2015 (COP20) and committed $2 billion more in 2021. He also led business leaders including Jeff Bezos and Mark Zuckerberg to launch the Breakthrough Energy Coalition, which has invested billions of dollars in zero-carbon technologies. Gates also advocates for sustainable solutions, meets with government and corporate leaders to promote sustainability, speaks out regularly and recently wrote How To Avoid A Climate Disaster.

While retired billionaires and billionaire founders of sustainable businesses such as EVs or battery companies are clearly leaders in the push to sustainability, even if they’re not changing their personal behaviour to reduce emissions, many others ignore or even resist initiatives to mitigate climate change. Given the scale and impact of the problem, though, action cannot wait. It remains to be seen whether the combination of climate change disasters disrupting businesses, government and consumer pressure to take action and even the better corporate performance demonstrated by firms that manage environmental risk better are enough to convince more billionaires to change their stance and push for sustainability. 

Keywords: Wealth, Electric Vehicles, Sustainability, Climate Change, COP26, Carbon Footprint
Institution: Gates Foundation, UN, Amazon, Tesla, Oracle
Country: China, United States
People: Jeff Bezos, Warren Buffet, Bill Gates, Mark Zuckerberg, Zeng Yuqun, Elon Musk, Larry Paige, Sergey Brin, Steve Ballmer, Larry Ellison, Bernard Arnault, Greta Thunberg, Antonio Guterres, David Attenborough
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