Buffett Warns That Shortcuts On Environment Risk Future Profitability

by Joseph Tohill on 04/11/2012

in Business,Earth,Politics,Technology

Warren Buffett

According to Warren Buffet, investing in the environment is crucial for businesses that wish to remain competitive and satisfy customers. Buffet highlighted the correlation between sustainability and profitability for businesses in a report published by Berkshire’s subsidiary Johns Manville.

Buffet is of course the chief executive officer and chairman of Berkshire Hathway Inc.

Buffett’s sentiments present nothing new to environmentalists who have long known the benefits of sustainable development. But in the business world, statements by one of the world’s wealthiest and most powerful investors do not go unnoticed.

Recently Buffett has been investing in green initiatives on a large scale – including a $2 billion solar farm purchase in California and a $1.8 billion solar plant in Arizona.

According to Buffett: “A company must invest in the key ingredients of profitability: its people, communities and the environment.”

He warns that businesses currently taking environmental shortcuts to achieve short-term profitability are only setting themselves up for failure in the future. In order to solidify their profitability in the future, they must green their business models and implement sustainability on a large scale.

Many analysts are already warning of the emergence of a carbon bubble – if this bubble bursts it could have serious ramifications for the world’s economic sustainability.

And with tipping points associated with irreversible global warming drawing ever nearer, there is perhaps no better time for businesses to invest in the triple bottom line than now.

What are your thoughts on Buffet’s public embrace of sustainability? Do you think his actions in renewable energy will influence other investors?

Image CC licensed by Fortune Live Media: Warren Buffett



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