Tag Archives: Warren E. Buffett

Warren Buffett, Berkshire Hathaway Agree with Elm on Sustainability Risk

A recent article on the absence of sustainability reporting for Berkshire Hathaway is highly thought-provoking.  The piece begins:

This company, as many of you may know, was founded and is run by the 80 year old Warren E. Buffett, the current chairman and CEO, one of the richest men in the world and, apparently, one of the most successful investors of all time. The Berkshire Hathaway company turns over about $30 billion and employs 287,000 people. It owns a long string of Companies, 10 of which are in the insurance sector, and the other 60 or so in a diverse range of sectors including textile and apparel, jewelry, furniture, gas, electricity, steel and many more. And now the moment you have all been waiting for:  ESG, CSR, citizenship, sustainability, responsibility or any form of similar non-financial disclosures are conspicuously absent from any of Berkshire Hathaway’s communications…

Apparently, the company seems to be sustainable, since, from its beginnings in 1965, the book value of the company has grown by 20.3% compounded annually, whatever that means, but it sounds successful.

And ends with

… it astounds me that there are still leading, influential, financially successful businesses such as Berkshire Hathaway, with the potential to do so much to engage 257,000 people in over 70 companies in a sustainability mindset and don’t. Even some basic things such as a common sustainability charter for all Berkshire Hathaway businesses, or attention to very basic direct impacts would be a good start, let alone the potential to develop business opportunity and advantage.

Is Warren E. Buffett missing a trick here? Or is he cleverer than most? Is his financial leadership so powerful that it blinds all stakeholders to all other aspects of doing business? I don’t know the answer. But it just makes me a little sad that we don’t see sustainability leadership from the direction of the Buffett empire.

Hmmm.  Perhaps the author is missing a few key points about – and relevance of – the long-term financial success of The Oracle of Omaha and his no-nonsense business philosophy.

What this article supports, however, is that it is valid to ask

What is the business risk of NOT implementing a sustainability program?

We at Elm have mentioned on several occasions that the same business considerations apply to investing in sustainability as they do any other investments proposed.  So the business risks of jumping into the sustainability pond must be thoroughly assessed in advance – and this should include a critical review of the need for doing so in the first place.  Unfortunately in many cases, companies make the decision from an emotional or “me too” perspective.

And obviously Warren Buffet agrees.