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Fund Manager David Herro Criticises Corporate ‘Climate Appeasers’

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Stephen Foley, Financial Times

A top US fund manager has accused multinational companies that signed a White House-sponsored pledge to tackle climate change of “appeasing environmental extremism”.

David Herro insists that his doubts about man-made climate change are borne out by ' data, data, data'

David Herro insists that his doubts about man-made climate change are borne out by ‘ data, data, data’

David Herro, who runs the $29bn Oakmark International Fund at Harris Associates, said executives at the 81 signatories, which include Johnson & Johnson, Intel and Hershey, were putting “pop science” ahead of shareholder value.

Mr Herro’s comments on FT.com and in an interview with the Financial Times put him at odds with other large shareholders who are pushing environmental concerns up the corporate agenda.

He was equally outspoken on the issue of climate change, saying man-made global warming remains unproven.

The White House said on Monday that 68 companies had joined the 13 original signatories to the “American Business Act on Climate Pledge” in support of a climate deal at the global summit next month in Paris.

“Our corporate leaders would rather cave in to political pressure that is based on pop science and emotion than focus on creating shareholder value? How sad,” Mr Herro wrote in comments under an FT.com article on the news.

“Shareholders should seriously question executives who appease such environmental extremism and zealotry,” he added.

Mr Herro made his name as a value investor in the Warren Buffett mould, and as an active manager unafraid to push his views on the companies where he is an investor. In 1994, he fought to oust Lord Saatchi from his eponymous advertising agency, and more recently has built a 7 per cent stake in Glencore, the commodities trading firm.

Four of the 10 largest holdings in his flagship Oakmark fund are car companies: Honda, Toyota, BMW and Daimler.

Mr Herro told the FT that he is a financial supporter of Lord Lawson’s Global Warming Policy Foundation, a think-tank set up by the former British chancellor to encourage a sceptical approach to climate science.

Man-made climate change was not proved by the data, he said, and the politicisation of the issue, particularly in the US, had made it impossible for other voices to be heard.

Anyone questioning the science was met with a chorus of abuse by opponents. “Their answer is . . . ‘ per cent of scientists’ and ‘Big Oil’. My answer is data, data, data.”

Many large investors, led by public pension plans such as Calpers in California, have been urging companies to change their businesses in response to global warming, and have sponsored shareholder votes demanding reports on corporate environmental impact and business risks from climate change.

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