Warren Buffett on Sustainability. Not.
I often get asked about how many of the Fortune 500 companies report on sustainability. I haven't seen a definitive number anywhere, so I thought I would check this out myself, perhaps starting with an analysis of the Fortune 100. I was happily working my way down the list, please to find in general that our leading business entities all have some level of CSR reporting, when I came accross Berkshire Hathaway Inc. whose website looks like it was built by a 6 year old some time in the 1920's. 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, jewellry, furniture, gas, electricity, steel and many more. And now the moment you have all been waiting for: ESG, CSR, citizenship, sustainability, responsibility or any from of similar non-financial disclosures are conspicuously absent from any of Berkshire Hathaway's communications. The number 11 company on the Fortune 500 list is transparently non-transparent. 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. Will the Company be sustainable after Warren Buffett ceases to manage it ? Who knows. But in the meantime, he appears to have led a very successful financial venture. In a A Special Global Pulse Report for the Boston College Center for Corporate Citizenship Corporate Reputation and Social Responsibility Rankings of The Most Respected U.S. Companies 2008, Berkshire Hathaway was ranked 9th out of a total of 203 companies anlysed. These rankings are not based on self-reported corporate information but over 20,000 ratings from people familiar with the company across the United States. What I want to know is: how do they know enough about Berkshire Hathaway to rate its workplace, governance, community contribution and leadership performance? (apparently environmental issues do not count in this index). Hmmm.
Some of the Berkshire Hathaway owned companies do mention CSR, sustainability or even produce a report on CSR.
The Acme Brick Company devotes one full webpage to sustainability.
The R C Willey (home furnishings) company has a page on charitable giving.
The Mid American Energy Holdings Company has a full section on environmental efforts and community involvement, but doesn't disclose environmental data or report in any way.
Clayton Homes has a webpage on giving back, and offers eco-environmentally friendly e-homes.
General Re takes CSR very seriously.. ahem... as can be seen from their couple of paragraphs on this subject.
NetJets have a carbon offset program .. grrrrrrrrrrrreat!
Larson Juhl have a journey to sustainability paved with sweet spots
Business Wire has a mission statement
Wesco Financial Corporation has a Code of Business Conduct and Ethics
but the jewel in the crown of Berkshire Hathaway companies is... tarararara........
Shaw Floors, who have a fully-fledged real genuine Sustainability Report for 2008.
Interestingly, there is an opening message from, yes, you guessed it, Warren E. Buffett, though he doesn't say anything remotely connected to the concept of sustainability. The report is a first report and nicely done.
Well, all I wanted to say, really, is that 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 dont 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.
elaine cohen is co-founder of Beyond Business, a csr consulting and sustainability and reporting firm (www.b-yond.biz/en ) and writes a blog on CSR-reporting ( www.csr-reporting.blogspot.com )