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.
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.
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