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Nurses watch a computer screen in Bogota, Colombia on February 18, 2021.

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LONDON – People fully vaccinated against Covid-19 are highly protected from serious infection, hospitalization and death from the virus. But coronavirus cases among the fully vaccinated – so-called “breakthrough” covid cases – are still seen in those who received two doses.

It does this for a number of reasons, experts note.

First off, none of the vaccines used in the US or Europe are 100% effective at preventing infections.

In addition, new Covid strains such as the highly contagious Delta variant – which is now widespread worldwide – have made the efficacy picture more difficult. There is also incomplete data on how long immunity to Covid lasts after vaccination.

The alarm was raised over groundbreaking Covid cases when preliminary data released in late July in Israel – which had one of the fastest vaccination programs in the world – showed that the Pfizer-BioNTech Covid-19 vaccine was only 40.5% effective at preventing symptomatic illness was.

The analysis, conducted when the Delta variant became the dominant tribe in the country, nonetheless found that two doses of the shot offered strong protection from serious illness and hospitalization, the country’s health ministry reported.

The data also appeared to show declining effectiveness of the Pfizer BioNTech shot, with the vaccine being only 16% effective against symptomatic infections in those who received two doses of the shot in January. However, in people who had received two doses by April, the rate of effectiveness (against symptomatic infection) was 79%.

However, a study conducted in England from April to May found that after two doses, the Pfizer BioNTech vaccine was 88% effective against symptomatic diseases caused by the Delta variant.

However, comparing the results is difficult given the differences in the nature of vaccination programs in the two countries (for example, Israel has given the Pfizer vaccine to the entire adult population, while in the UK several vaccines with the Pfizer BioNTech shot mostly at younger people) as well Differences in study dates, Covid test regimes and age groups.

Like the Israeli data, the English data concluded that the Pfizer-BioNTech Covid vaccine was 96% effective against hospitalizations from the Delta variant after two doses. Similarly, after two doses, the Oxford-AstraZeneca vaccine was found to be 92% effective in preventing hospitalization.

Initial efficacy data from clinical trials published by Pfizer and BioNTech last year for the vaccine showed that the vaccine was 95% effective against infections caused by strains of the virus circulating at the time.

Professor Lawrence Young, a virologist at the University of Warwick Medical School in the UK, told CNBC that cases of Covid in fully vaccinated people are a reminder that “no vaccine is 100% effective”.

“There will always be a proportion of people who are still susceptible to infection and disease,” he said on Monday.

“There are also two other factors that affect the effectiveness of the vaccine: (1) Waning immunity – we still don’t know how long the protective immunity induced by the vaccine will last. This is very likely a factor in older and more vulnerable people who vaccinated at the beginning of the vaccine rollout program, “he noted.

The second factor, he added, relates to “breakthrough infections in vaccinated individuals due to the more contagious Delta variant,” which made the case more important for booster programs, he said. In the case of booster programs, the jury has not yet made a decision, in the USA and Great Britain a decision has yet to be made

Breakthrough cases by number

It’s difficult to know the full extent of the “breakthrough” Covid cases, but figures from NBC News have shown that at least 125,000 fully vaccinated Americans have tested positive for Covid and 1,400 of them have died. Still, the 125,682 “breakthrough” cases in 38 states found by NBC News represented less than 0.08% of the more than 164.2 million people (and will be) fully vaccinated since the beginning of the year, or about every 1,300.

That is, the number of cases and deaths among the vaccinated is very low compared to the number among the unvaccinated. Health authorities, especially in the US, are urging unvaccinated people to register for a Covid vaccination.

Andrew Freedman, an infectious disease reader at Cardiff Medical School, UK, told CNBC that “breakthrough cases” are expected.

“The vaccines are very good at protecting against serious infections, hospitalizations, and death, but they are less effective at providing complete protection against infection, and we know that many people who have been fully vaccinated are still having delta infections in most cases get mild symptoms. ” “He said on Monday to CNBC’s” Squawk Box Europe “.

“What we don’t know is whether an additional booster actually increases protection and reduces infections with delta variants,” he noted.

It must be emphasized that studies show that fully vaccinated people are much less likely to contract Covid – or even contract the virus at all.

New research from the UK published last Friday showed that people who were double-vaccinated were three times less likely to test positive for the coronavirus than those who were not vaccinated.

Analysis of the PCR test results in the REACT-1 study – a large coronavirus surveillance program in the UK led by Imperial College London – also suggested that fully vaccinated people may also be less likely to pass the virus on to others than those who were not vaccinated, because they have an average lower viral load and therefore probably less virus shedding.

Professor Paul Elliott, director of the Imperial School of Public Health’s REACT program, said the results highlight both the benefits and the limitations of Covid vaccines.

“These results confirm our previous data, which show that both doses of a vaccine offer good protection against infection. But we also see that there is still a risk of infection as no vaccine is 100% effective and we know that some are double vaccinated. “People can still get the virus,” he said.

Steven Riley, professor of infectious disease dynamics at Imperial, said “breakthrough infections” need further investigation in fully vaccinated people, especially as parts of the world are grappling with the spread of the Delta variant.

“The Delta variant is known to be highly contagious, and as a result, we can see from our data and others that breakthrough infections occur in fully vaccinated people. We need to better understand how contagious fully vaccinated people become infected as this will help better predict the situation in the months to come, and our results will help build a broader picture of it. “

Berkshire Hathaway CEO Warren Buffett (L) and his business partner Vice Chairman Charles Munger are among the five Berkshire directors age 90 or older. Berkshire experts expect board changes to be among the most significant influences for the company’s future path.

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Berkshire Hathaway is one of the best-run public companies of the 20th century, with the financial performance to prove it. But as the 21st century brings a new generation of investors shifting from pure shareholder capitalism to the stakeholder capitalism aligned with environmental, social and governance mandates, is Warren Buffett’s company positioned to be an ESG leader or laggard? The answer isn’t so simple.

Look at the ESG rankings — far from perfect methodologies at this early stage of the industry’s development — and the answer isn’t kind to Berkshire. Whether it’s MSCI ESG or the scorecard from ESG specialist JUST Capital, Buffett is in a position he isn’t used to: near the bottom. 

But by some operating business measures, Berkshire Hathaway — just by doing what it does — is delivering on ESG. Berkshire Hathaway Energy, its utility company, is the biggest producer of wind energy in the U.S. Buffett’s largest stock holding, Apple, is consistently ranked among the best ESG companies in the market. On diversity, Berkshire just elevated the first-ever female CEO to run a U.S. railroad company, at Burlington Northern. Its board includes a Black director (Ken Chenault), an Indian director (Ajit Jain) and four women. But turnover of the board has been, according to Berkshire experts, too slow. 

The world’s biggest investor votes against Buffett

None of the Berkshire attributes that can be judged as ESG favorable was a factor for BlackRock, the world’s largest asset manger and the biggest force in ESG investing, when it came time to vote in the just-passed proxy season. BlackRock voted against two Berkshire directors — the directors of its audit and governance committees. And it voted with shareholders on requirements that the company produce a climate report and its holding companies produce diversity reports. BlackRock singled out Berkshire Hathaway — a step it takes with only a select group of companies in its annual investment stewardship report — as a company that left it with no choice but to vote against management.

“Berkshire Hathaway has a long history of strong financial performance; however, we had concerns related to our observation that the company was not adapting to a world where sustainability considerations are becoming material to performance. For several years BIS attempted to engage with Berkshire Hathaway, but our requests for direct dialogue were not granted,” BlackRock wrote in the report.

What stands between BlackRock and engagement with Berkshire, may be no more than Buffett himself. And, according to Berkshire experts, there isn’t an expectation that the company will more visibly embrace ESG as long as Buffett is running it. 

“He can do what he wants,” said James Shanahan, an Edward Jones financial services sector analyst who covers Berkshire. “I don’t think Buffet cares what Blackrock thinks. He runs the company for Berkshire investors, not BlackRock.” 

Even the ESG experts are hesitant, for now, to take to hard a line against Berkshire.

Martin Whitaker, CEO of ESG investing specialist JUST Capital, which was co-founded by hedge fund billionaire Paul Tudor Jones, said the biggest problem with Berkshire Hathaway to date is the lack of disclosure, but that does not mean Berkshire isn’t taking actions that are in line with ESG goals. It means Berkshire just isn’t playing ball with the new way to show the market its ESG credibility. The problem: it’s difficult to give companies the benefit of the doubt when the information isn’t available.

“Look at the history of disclosure of financial performance over the past 100 years. Think of ESG in analogous terms being in the first inning,” Whitaker said. “But if you’re an emissions-intensive company and you’re not disclosing emissions and all your competitors are, then it’s natural people will look and say it’s not good, maybe you’re hiding something. Disclosure has always been a sign of having your act together and being confident about strategy.”

He doesn’t think Berkshire can stick with its current stance forever. “The issue with disclosure is it’s coming, whether they like it or not, people want to know. .. and that journey starts with data and analysis, and at some point they have to start to disclose more,” Whitaker said.

Buffett’s ‘unassailable control’

Buffett still owns a massive stake in Berkshire shares even as he has reached the halfway point of donating his company stock to philanthropy. In announcing the milestone in June, Buffett explained that one of the reasons he chose to make the share gifts gradually was to retain “unassailable control” over the company. That isn’t changing yet. 

Shanahan, and others who closely follow Berkshire, are hesitant to say Buffett’s company will ever take an approach to ESG that takes its lead from others. Rather, what ESG will mean to Berkshire could be already embedded in its management approach and its unique structure, decentralized with all the individual affiliate management teams at the operating companies making their own decisions. 

“ESG will matter at some point,” Shanahan said. “But more from a business standpoint.”

A good example of that ESG approach is the utility business. In the past, when challenged by shareholders, including one of the most formidable climate scientists in the world, James Hansen of NASA, Buffett said believing that climate change is real on a personal basis does not mean believing it should be the basis for investment decisions. And that is why for a capitalist running one of the largest utility company’s in the U.S., and one of the largest insurance businesses in the world, Buffett’s dismissal of climate disclosure as material to Berkshire shareholders has attracted criticism. 

On Monday, the UN’s Intergovernmental Panel on Climate Change delivered its starkest climate change outlook yet, saying it is “code red for humanity.”

If they focus on ESG through the business lens and financial lens, they will see climate as a big issue. I don’t need them to make a big song and dance about it, but they should be disclosing what they are doing.

Martin Whitaker, JUST Capital CEO

Whitaker, who worked in the insurance industry earlier in his career, said SwissRe began analyzing climate as an economic risk many years ago. Berkshire has a large presence in reinsurance like Swiss Re, and Whitaker noted, “as a reinsurer, you are holding the bag. … I’d be shocked if they are doing nothing on climate, they are in industries which are really in on the long-term climate risk: insurance, infrastructure, transportation, real estate. … they are all now already affected.”

Berkshire’s utility business — and its coal footprint — are changing. The percentage of generation from renewables has been rising steadily, whether in its Iowa wind corridor or in the Southwest where solar is economic as well. The percentage of coal shipments made by Burlington Northern have been going down (though a reflection of the market for coal more than conscious Berkshire strategy). Burlington Northern revenue from coal has declined from over 20% in the 2014/2015 period to 13%, Shanahan noted, while the utility company’s contribution from renewables has steadily increased to over 40% of generation, among the highest in the U.S.

Siemens wind turbines operate on a wind farm in Marshalltown, Iowa, managed Berkshire Hathaway Energy’s MidAmerican Energy.

Timothy Fadek | Corbis News | Getty Images

Berkshire’s $10 billion deal for the natural gas assets of Dominion Energy is an example of how the ESG issue can be viewed in more than one way. Natural gas has been taking share from coal for a decade and is a cleaner fuel which is viewed by many as a “bridge fuel” to a fossil fuel-free future, but it isn’t a renewable and it is closely tied to fracking. 

Berkshire Hathaway Energy, specifically, voiced support for the Paris climate agreement and committed to some reductions in emissions as far back as 2015.

“It seems like the environmental footprint is improving,” Shanahan said, and he worries about a company known for making shrewd investments that other investors bail on too quickly, moving to adopt an ESG approach dictated by outside factors.

Buffett invested in natural gas at a time when many ESG investors were critical of any fossil fuels, and invested in Pilot Flying J truck stops and a large network of auto dealerships. At the outset of the electric car and autonomous truck era, it’s easy to see these investments as being out of favor and subject to ESG scrutiny. But Shanahan said if ESG thinking were to prevent Berkshire from making the value-oriented investments that generate a lot of cash flow over the next 10-15 years, it would have the wrong impact on shareholders. 

The next generation of Berkshire investors

Greg Womack, a long-time holder of Berkshire shares for clients of his investment company Womack Investment Advisers, said it isn’t clear to him if Berkshire Hathaway would fit in an ESG portfolio today, but to date, the financial performance is there, including the most recent quarterly earnings released over the weekend that showed the company rebounding from the pandemic. 

Buffett has made an entire generation of American stock market investors wealthy, and mostly a generation of Baby Boomers whose investment process pre-dated the recent rise of ESG. But a post-Buffett Berkshire faces not only the CEO succession issue, but a generational transfer of Berkshire stock among its shareholders. Many current holders may choose to pass down shares rather than sell due to tax considerations, and that has Shanahan thinking about a gradual shift in investment beliefs.

The Edwards Jones analyst said he already is having conversations with investors in their forties and fifties who have been allocated Berkshire shares by parents who have owned for many years and are now in their 80s or 90s. Many have investment views not dissimilar from their parents, but Shanahan said there is a clear change going on among retail investors when it comes to ESG. He thinks it will make at least some shareholders more critical of the Berkshire board and management, and for some, it could become a factor in the decision to hold onto shares (though he said Berkshire being an “old economy” company may weigh just as heavily in a tech-dominated market). 

“I don’t think there is a major threat of losing a generation of investors,” Womack  said. “At the end of the day, any investment also has to have a good return on money. … You can’t beat its track record,” he said.

The world’s greatest investor versus the ESG index fund

One of the biggest opportunities for Berkshire to show it is changing will be upon succession to a new CEO, Greg Abel, who now runs the company’s utility business, and the opportunity to reconstitute the board, which Shanahan described as one of the most significant opportunities at Berkshire.

“The lack of diversity is striking and warrants major changes in the next few years,” he said, but added, “it’s unlikely to happen while Buffett is there.” 

Berkshire’s board does have a diversity problem, according to Lawrence Cunningham, a George Washington University professor and an expert on Buffett and the company, but the problem is about age rather than gender or race. “It leans elderly. The youngest person is 60 and 5 are in their 90s,” Cunningham said. “As Warren leaves, so too will the others who are in their 90s, and Greg [Abel] will have a chance to nominate or appoint younger replacements.”   

The Berkshire shareholder base has been changing, not from parent to child as much as from a substantial increase in the percentage of shares held by indexers benchmarked against the S&P 500 Index. 

As Womack put it: “Most of your publicly traded companies, the larger ones, over time will be forced by the market to eventually address this.”

The index fund factor is evident in the recent voting results from Berkshire’s annual meeting. The votes against Berkshire management were higher than ever before — still 75% with the board, but roughly 25% in favor of proposals, twice the highest vote against Berkshire’s management on a percentage basis ever, according to Cunningham, which he sees as a growing threat to Berkshire’s decentralized model of management. A multitude of climate proposals over the past decade had never received as much as 10% support from shareholders, and a diversity issue from last year garnered half the support of the more recent vote.

Cunningham doesn’t see individual investors being “conscious capitalists” in these voting results. He sees the hands of the passive investment giants like BlackRock. “The crowd agitating for more tend to be passive index funds and related gurus, not the individual shareholders who have always been the backbone of Berkshire,” he said. “If that trend continues, so will this voting, which is robotic rather than analytical.” 

“Blackrock is too powerful, too big and too powerful,” Shanahan said. “Should any passive investor have that kind of market power to influence decisions of public companies and boards?”

Companies that speak loudly about ESG issues like climate but are not making the investments that align with that message, or are even fighting against climate regulation in some cases, may end up getting ESG credit over companies making good fiduciary decisions and generating returns for shareholders but not disclosing more. That’s a problem, Whitaker says. “If they focus on ESG through the business lens and financial lens, they will see climate as a big issue. I don’t need them to make a big song and dance about it, but they should be disclosing what they are doing,” he said.

Buffett’s own history of focusing on an “ownership” mentality should result in his company wanting to lead on these issues and relative to peers. “His philosophy is treat an investment as being an owner, and know about the business you are investing in, and that’s good advice for any ESG investor … To report on climate risk is hugely important and so what are they doing to put my mind at rest about this? It would help a shareholder to know they have this under control,” Whitaker said.

Over time, Cunningham expects Abel — who as the head of the company’s energy subsidiary has been front and center in its efforts to respond to climate concerns as a business —to put his personal imprint on Berkshire when a post-Buffett era commences, but also continue the decentralized, autonomous approach “that is baked into Berkshire and runs in Greg’s blood too.”

In his view of Berkshire and ESG, one can see how those who closely charted the success of Buffett and Berkshire Hathaway in the 20th century are concerned about what could come next. “My advice on ESG is to emphasize its traditional and mainstream aspects rather than radical reinterpretations of corporate purpose,” Cunningham said.

An Afterpay logo is displayed on a smartphone.

Igor Golovniov | SOPA pictures | LightRakete | Getty Images

“Buy now, pay later” options are becoming increasingly popular, but analysts warn of the risk of default in the face of a lack of credit checks and “opaque” debt reporting.

Not being able to review consumer credit history could result in lenders underestimating borrowers’ debts when evaluating new loan applications, they said. There is also a risk that consumers will use more credit card debt to meet their “buy now, pay later” (BNPL) obligations, analysts warned.

BNPL providers typically work with retailers – both online and in stores – to enable consumers to pay in installments, with perks such as no late fees and often high credit limits.

Such payment options are becoming increasingly popular with younger consumers, especially when shopping online, and in recent years more and more companies have started offering the service.

These companies don’t do credit checks on these people … during a downturn, they may be the first to buy now and not pay later.

Stephen Biggar

Director of Financial Institutions Research, Argus Research

Default risks

In a recent report, Fitch Ratings said reporting on the sector’s debt trends was “opaque”. Many of these providers do not report the use of such services to credit agencies, according to the rating provider.

“As a result, BNPL debts are often not visible in the credit file and borrowers could try to obtain BNPL credits from multiple providers,” Fitch analysts write. “Lenders (including non-BNPL) may underestimate a borrower’s level of debt when taking on new debt.”

Stephen Biggar, Director of Financial Institutions Research at Argus Research, warned that defaults were “one of the main risks”.

“These companies don’t do credit checks on these people,” he told CNBC’s Squawk Box Asia last week. “During a downturn, they may be the first to buy now and not pay later.”

This is how “buy now, pay later” works

Traditionally, installment payments have been offered in shops for decades. However, in the past, this was typically the case for large-volume items such as furniture, electronics, and home appliances, which cost thousands of dollars.

The latest buy now, pay later plans span a segment between credit cards and installment payments. Focused on younger and more tech-savvy users, they are offered for online purchases that can range from $ 10 to $ 20 or up to thousands of dollars.

One of the most popular providers is the US-based pay-over-time company Affirm. The maximum amount that can be taken out with Affirm for a single payment plan is $ 17,500.

Many of these financial technology apps offer sweets that credit cards and traditional installment payments don’t – sometimes they include no late fees, low or no interest rates, high credit limits, and no required credit checks. The conditions vary depending on the provider.

On the flip side, the cost of borrowing can skyrocket if consumers don’t read the terms carefully.

There are some potential pitfalls in the fine print: additional fees like additional fees for rescheduling payments, and some providers charge high late fees.

Analysts also warn of the propensity for impulse purchases given the simplicity of the application process and the lower cost of credit compared to credit cards.

The use of such payment options skyrocketed during the pandemic as online shopping increased, Fitch said.

In the US, these short-term rate-related loans increased 215% year over year in the first two months of this year, according to Adobe Analytics. The data showed that consumers using such services place orders that are 18% larger compared to the same period in 2020.

The volume of e-commerce payments made through BNPL in the US rose to $ 19 billion last year – more than double the $ 9.5 billion spent in 2019, Fitch said, citing estimates from the Payment company Worldpay.

BNPL users cannot afford the regular repayments and may turn to credit cards or other forms of high-yield debt to help repay BNPL debt.

The providers that have appeared in this segment include Affirm, Quadpay and Klarna.

More established financial firms have also jumped on the bandwagon: PayPal, Mastercard, American Express, Citi, and JP Morgan Chase all offer similar credit products, while Apple reportedly plans to offer such a service as well.

Credit card debt could skyrocket

Fitch warned that such debts could “buy now, pay later” and even spill over to credit card debt.

“BNPL users cannot afford the regular repayments and can turn to credit cards or other forms of high-yield debt to repay BNPL debt,” it said.

US household debt rose by the highest dollar in 14 years in the second quarter, according to the Federal Reserve. While this was mainly due to a surge in the housing market, credit card balances also grew $ 17 billion from the first quarter to a total of $ 787 billion.

According to Fitch, findings from the Australian Securities and Investment Commission in November showed that 15% of Australian consumers using such pay-later programs had to take out an additional loan the previous year in order to pay off their BNPL plan on time.

In the United Kingdom, Fitch quoted a major UK bank that reported that of their 660,000+ customers who paid their BNPL providers, 10% had exceeded their overdraft limit in the same month.

Argus Research’s Biggar told CNBC that Square’s transaction losses “rose significantly” in the past quarter.

According to Square’s 2019 annual report, transaction and credit losses for the year ended December 31, 2019 increased 44% year over year.

Speaking of the risks of consumers missing out on payments, he said, “This is definitely a problem as we look to the next possible downturn … these loans have to be covered by something.”

In comparison, credit cards have “security features” built in, including cutting off access to the card, he pointed out.

– CNBC’s Jeff Cox contributed to this report.

Traveling between the islands in Hawaii by commercial flights or chartered aircraft is easy, but it can take more time than travelers expect.

Fabrizio Gandolfo | PA pictures | LightRakete | Getty Images

Hawaiian Airlines told U.S. employees on Monday that they needed to be vaccinated against Covid-19, making it the third major airline to issue such a mandate in less than a week.

CEO Peter Ingram told employees that if they receive a two-dose vaccine, they must have their second vaccination by Nov. 1, although there will be exceptions for medical or religious reasons, according to a CNBC-verified employee note.

Last week, United Airlines became the first major airline in the country to mandate vaccines, requiring their 67,000 U.S. employees to provide proof of vaccination by October 25th at the latest. Frontier Airlines also announced that their employees must be vaccinated against Covid or regularly tested by October 1.

“There is no better demonstration of our values ​​than ensuring the safety of others,” Ingram said. “Safety is the foundation of air travel and it is ingrained throughout our operations and service. It is no different.”

More than a dozen large U.S. companies have issued vaccination mandates to all or some of their employees in the past few weeks, with some executives citing concerns about the rapidly spreading Delta variant of Covid.