Warren Buffett On The Environment, Businesses Can't Take 'Shortcuts'

What's bad for the environment is also bad for the bottom line.

That's what Warren Buffett is arguing in the latest sustainability report from Johns Manville, a building-materials manufacturer owned by Buffett's company Berkshire Hathaway. In a short note toward the beginning of the report, Buffett writes that "taking shortcuts is not the pathway to achieving sustainable competitive advantage, nor is it an avenue toward satisfying customers" -- evidently a reference to the importance of keeping a business green-friendly and compliant with rules.

Buffett -- investor, philanthropist, tax-the-rich cheerleader and occasional Obama whisperer -- seems to put great stock in the idea that environmental prudence goes hand-in-hand with profit.

As Bloomberg notes, Berkshire Hathaway has thrown its weight behind renewable energy efforts, including wind and solar power facilities, and made substantial investments in railroads, which Buffett has called the "most environmentally friendly" shipping method -- evidently in the belief that these are all growth industries.

Buffett's remarks come at a moment when domestic energy production is a major focus for the Obama administration -- and when lawmakers and government agencies are sparring over how best to police emerging industries like hydrofracturing, a form of natural-gas extraction that critics say poses a grave risk to the environment.

Conservatives have been pushing back against environmental regulations, with their efforts becoming especially focused in recent months, and the Environmental Protection Agency has been taking a permissive approach lately, issuing decisions on fracking and carbon emission that seem to reflect a hands-off philosophy.

But Josh Bivens of the left-leaning Economic Policy Institute has argued that strong environmental regulations are helpful in a weak economy, since they create new employment opportunities without causing the kind of price spikes that hurt consumers and consumption.

As for energy companies, Buffett isn't the only one to notice that they need to be reminded to keep up with the rules. Almost two-thirds of energy companies surveyed in a recent poll by Grant Thornton said they have yet to implement regulations mandated by the Dodd-Frank financial regulatory act.

Comments

[Holly Holst Gamel Masri]

02:27 PM on 04/26/2013

I've just been reading about Buffett's ANTI-environmental choices, the ones he doesn't say much about. He is heavily invested in coal, and is currently in the process of building a railroad through Montana that will ultimately allow him to ship coal to China from the West Coast... because US demand for coal is dropping. Railroads may be a great form of "green" transportation... but NOT when they're shipping coal. That's about as environmentally-UNconscious, and as cynical, as anything I've ever seen. Buffett is NOT, ultimately, a green-investment hero. He's a likeable ultra-capitalist, who has a way with words. He may be better than some... but only because that bar is set so very, very low.

[ecotea]

02:48 PM on 04/13/2012

If Mr. Buffett believes what he's conveying -- Why is the Gate's Foundation infested with Monsanto Executives? One of the biggest monopoly short-cutter's in agriculture.

[HIPinvestor]

03:47 AM on 04/13/2012

Glad to see Warren Buffett recognizing that environmental sustainability can lead to higher profitability and lower risk. Hopefully, Berkshire can continue to implement more sustainability in its 100%-owned companies and partially-owned companies? This in-depth chart shows the ways BRK is being “More sustainable (HIP)” or “Less Sustainable (HIP)” :
http://hipinvestor.com/wp-content/uploads/BerkshireHathaway-HIPinvestor-SustainabilityGRID-v2011.pdf

[Genders]

10:22 PM on 04/07/2012

Sure they can take shortcuts, and sell before it all crashes.

[The Contrary]

01:35 AM on 04/05/2012

Buffet is making smart choices not only for his businesses but also for American industries because he is helping to create and support new businesses like clean energy or mass transportation of goods via railroad.

Who would have thought the internet would change the world in its infancy days? Alternative energy technologies and transportation is no difference.

Republic'CONS' politicians are entrenched in their ways of thinking and thus doing. It has been said that "insanity is keep doing the same thing and expecting different results". Insanity is best to described the Republic'CONS'.

[r3000]

11:45 AM on 04/04/2012

Buffet is the fifth column. Go back to Russia, comrade.

[madcowfj]

12:24 PM on 04/04/2012

Huh....so you are saying the man who probably is the poster child for capitalism and you say he is a communist.....

[r3000]

12:56 PM on 04/04/2012

wutt hee sed waz librul, sow i had tu konklood

Joking.

[Vera Gottlieb]

04:30 AM on 04/05/2012

What on Earth has communism got to do with all of this? Having a social conscience is not communism, seeing to it that all are well-off is not communism, building enterprises from which people/country can profit is not communism. But if it were...it would work if corruption was taken out of the equation.

[Genders]

10:52 PM on 04/07/2012

You fool, That was Reagan, the guy who convinced you dupes that the democratic republic was the enemy and big money was you savior. And you fell for it. wow.

[r3000]

11:21 PM on 04/07/2012

My bad. He said something librul so I suspected he must be one of them or Kenyan at least. Really, just goofing on the dumb conclusions the conservatives jump to. If I don't make fun, I have to face the fact that it's very sad.

[Vera Gottlieb]

04:15 AM on 04/04/2012

Is this guy having conscience pangs before 'kicking the bucket'??? He has been around for years and only now he decides to speak up??? I guess better late than never, eh?

[Josh Crawford]

10:33 PM on 04/04/2012

Where have you been for the last 20-30 years? There's a reason they call Buffet the"Oracle of Omaha: when he talks (and he talks about a lot of things quite regularly and has for decades) people listen.

[Vera Gottlieb]

04:32 AM on 04/05/2012

I admit I am not a financial guru but...you say people listen but in these 20-30 years has any visible/noticeable change occurred? Or is it just talk?

[Overtone]

02:11 AM on 04/04/2012

A revolution is being born in the energy arena. Competitive, renewable, technologies are emerging that can supersede fossil and Uranium fuels.

One example is the hydroelectric fuel cell invented in Vietnam. The only fuel is water: fresh or salt. A 2,000 watt generator for homes is expected to be in production in June, priced at $1,600.

To learn more about this and other breakthrough technologies, see Moving Beyond Oil and Cheap Green at www.aesopinstitute.org

An unrecognized potential nuclear nightmare may sharply accelerate decentralized energy.

Solar flares are shockingly likely to collapse power grids and without grid power nuclear plants are likely to melt down. See the opening page of the same website.

Much can be done to avoid the worst. So far, there is mostly a bit of talk and little action.

Changing that may save many millions of lives, if wise decisions are made rapidly.

Since NY and Washington are cities that may never recover from nearby meltdowns, it would seem time to see a major program emerge.

[ThinkinPerson]

04:22 AM on 04/04/2012

Ok, I went and looked at the site. I am interested to know what we can do, what options are out there.

Yet, when I read GMO, sorry, that's not an advance. We have hemp that can be grown right now, right away, without adding GMO's into the system. Sorry, for me, that's out. Nature has the resources, and the crazy thing is that GMO's are based on nature, adding in the assumption we can make it better.

Research into mushrooms and corn - their potential to clean up toxic land - we need that kind of science, not recreated, recombinated, and someone else owns that we have to beholden and then they are buying our politicians.

We've got plenty of land, we still have sun and water, let's start doing something real, something available to us today, for which we have infrastructure.

I appreciate the ideas you presented, and I'm going to look more by GMO's for me, I feel that they are messing with the planet and our bodies in ways that are hidden from us, purposefully, and I ask why. I don't want to waste my time on studies that people buy, we know the science, its available to us right now.

[PlayTOE]

03:29 PM on 04/07/2012

The "water as a fuel" scam has been around for years. Don't invest till they show up with a working model that has been peer reviewed by independent scientists. Better, don't invest till they show up with a product on the market and it passes tests for reality.

[Overtone]

05:26 PM on 04/07/2012

There is no mention of investment. They are not seeking any.

IF you bother to read Moving Beyond Oil and Cheap Green on the Aesop Institute website you will find that the inventor holds 37 U.S. Patents. almost all granted when he was with Hewlett Packard and Kodak.

Since it is expected to be in the market throughmore than 500 dealers in Vietnam in June, reality will become clear soon enough.

[oftenon]

02:06 AM on 04/04/2012

Is Warren the last vestige of American enterprise's sanity, integrity and sustainability?

[JPETERB]

12:23 AM on 04/04/2012

Dear Mr. Buffet,

No large transnational corporation cares about the future of our planet or the 99% who live on it. Your investments have enabled them to ignore facts and outcomes about the degradation of the environment for as long as you have been an investor. You and the rest of the 1%'s unlimited demand for ownership, wealth, capital gains and dividends are the major reason they CAN LEGALLY AND COMMERCIALLY ignore the accelerating harm that unregulated global trade is doing to the environment.

The rest of us.

[jleveryday]

12:43 AM on 04/04/2012

I'd like to take a different approach here...

Dear Mr. Buffet, China and the rest of the world can't wait for you to incur unnecessary green costs so that it will drive either the price of your cost of goods up or lower the margin of your product sales. In the meantime they are going to keep shoveling coal in their power plants and throwing that Co2 in the air (since it really isn't causing global warming anyway) so they can kick the crap out of us on price point!

[JPETERB]

10:41 PM on 04/04/2012

We cannot breed, breath or eat commerce.

[byebyebarry]

10:55 PM on 04/03/2012

Hey Uncle Warren, tell us about the $100M lawsuit with the IRS/Treasury...why fight? Shouldnt you be giving yr fair share?

[1logicalthinker]

01:47 AM on 04/04/2012

Please provide a link to this "$100M lawsuit with the IRS/Treasury," of which you speak. Otherwise, you're just blowing smoke.

[Swanndog]

12:17 PM on 04/04/2012

http://www.businessinsider.com/warren-buffett-hypocrite-extraordinaire-2012-4

[byebyebarry]

01:44 PM on 04/04/2012

http://online.wsj.com/article/SB10001424052970203611404577046374108267952.html

Do step outside you lib shell

[Josh Crawford]

10:36 PM on 04/04/2012

Hey, byebye, that case is being litigated over a valid dispute. How about you let the process work to an end before you give us your ignorant input? Thanks.....

[byebyebarry]

11:19 PM on 04/04/2012

Oh, you mean like the Martin case in FL...?

[Philclock]

10:53 PM on 04/03/2012

Unlike Big Government, business doesn't survive if it takes "shortcuts", like raising revenue from raising tax rates on the "rich"; any idiot knows, you RAISE REVENUE THROUGH GROWTH OF THE PRIVATE SECTOR, WHICH THEN POURS MORE REVENUE TOWARDS THE TAX MAN!!

Raising the tax rates CHOKES OFF incentive to bring in more revenue, and triggers REVENUE AVOIDANCE STRATEGIES FOR BUSINESS AND INDIVIDUALS!!

Duh!!

Unless, like Buffet and the Democrats, you think you're above it all, because you're swimming in OTHER PEOPLE'S MONEY FOREVER; Buffet from grandfathered partnerships, Democrats from their arrogance at using the government printing press whenever it so chooses.

THIS is what happens, when the inexperienced and incompetent are elected to office; or decide they know better than we the great unwashed, how to run our lives.

[Repo 105]

11:38 PM on 04/03/2012

Uh, we want to shrink government and have a limited, small government. You apparently want the government to have MORE money. Why on earth do you want that? You want MORE government?

Sorry, we don't want your big government. Raise tax rates so that revenue will decrease. STARVE THE BEAST!

[Philclock]

11:46 PM on 04/03/2012

PRIME DIRECTIVE: GROWTH!!

METHODOLOGY: LOWER TAX RATES, PULL BACK GOVERNMENT INVOLVEMENT: LEGISLATION, REGULATIONS, REGULATORS, TRASH THE DEPARTMENTS OF COMMERCE, EDUCATION, ENERGY, HHS, HUD, maybe some others, too.

GREATER GROWTH = MORE GOVERNMENT REVENUE, EVEN WITH LOWER TAX RATES! USE EXCESS MONEY TO BUILD DEFENSE BACK UP, THEN PAY DOWN DEBT!!

Devil's in the details, apologize!!

I am not, nor have I ever been...well, a long time ago, in a galaxy far, far away, I voted for McGovern, but because he was an old bomber pilot and small businessman, really!....a "progressive", IE collectivist!!

[moland]

05:45 AM on 04/04/2012

As long as you only pay attention to conservative pundits and politicians, it'll be easy for you to believe the crap they are selling you...Take a look outside your Foxhole for a little reality now and then and you may be able to understand Buffet...or something.

[Philclock]

09:36 AM on 04/04/2012

OK, then school me to YOUR reality, what policies do you propose to hand off to the next generation? They gonna live with "public-private partnerships" in every industry, more bureaucrats joining the IRS already in our bedrooms, demanding "where are your papers" whenever they see fit? Or you gonna give them freedom, free choice, individual responsibility? Which is it?

[Kye154]

10:20 PM on 04/03/2012

Whatever position one takes on Warren Buffett, the sustainability plan, he is supporting is a good course of action for industry to take. It makes much more sense from a corporate dollar and cent standpoint, than the business of anything goes, like they have before. If one wants a glimpse of how businesses have previously gotten themselves a black eye by ruining the environment, one only has to visit the Appalachian region of West Virginia, or Love Canal, or the north side of St. Louis, or Cancer alley along the Mississippi river north of New Orleans, or take a trip to China and visit any suburbs of any Chinese city to see the filth and destruction left behind.

[blndgenie]

08:14 PM on 04/03/2012

reportedly also enriching his own net worth by about 140 million in that foreclosure 'settlement' with the feds and state AGs. While a fraction of the foreclosed got a whopping $2000. AWESOME, W *B!

[stevenurke]

06:48 PM on 04/03/2012

Buffett owns NetJets. Anyone else find him highly effing hypocritical?

[wwhatever747]

07:03 PM on 04/03/2012

Re: Yet he refuses own or to fly in one as his private jet.

He flies commercially.

He still lives in his 1 room house since the 1950's. He's playing with money like a kid and giving advises to his CEOs as a hobby.

[Ralph Petersen]

08:02 PM on 04/03/2012

Read the book over again, he flies Net Jet because it saves him time.

[blndgenie]

08:15 PM on 04/03/2012

Except for his awesome ski home out west.......LMAO! You people are amazingly gullible.