What Happens to Companies That 'Go Green'
Have you heard the one about the company that âwent greenâ and ended up actually saving money? Sounds great, doesnât it?
The problem is the connection between the two is less than certain.
â[T]he mutual fund I manage, the Free Enterprise Action fund, weâre actually filing a petition with the SEC in the upcoming week to require these companies to disclose the business risk of global warming alarmism and global warming regulation,â Steve Milloy, head of the Free Enterprise Action Fund and webmaster of Junkscience.com, said on CNBCâs October 12 âStreet Signs.â
âYou know, weâre seeing a lot of bad things come true, Milloy explained. âFor example, Caterpillar (NYSE:CAT) â they are lobbying for global warming regulation. At the same time, global warming regulation is going to harm their biggest customer â the coal industry.â
âWeâve also seen PepsiCo (NYSE:PEP), who is also lobbying for global warming regulation â their worst nightmares are coming true because now there is a backlash against bottled water,â Milloy added.
Although a âgreenâ company image has been a popular for marketing, Milloy warned that lobbying for regulation is not in the best interest of many companiesâ shareholders.
âHigher energy costs are also going to hurt their earnings. Higher raw materials costs â there are costs that are coming to these companies that are lobbying for global warming. If they havenât realized yet â they have drank the green Kool-Aid and we need to force the SEC to require them to disclose the risks to shareholders.â
However, âStreet Signsâ host Erin Burnett asked if it was a wise business decision for a company to be at the forefront of regulation, so that when regulation comes, they would be able to have a voice in what the regulations are.
âWe donât know the regulation is going to happen,â Milloy said. âFirst off, we need to see some bills and find out who the winners and losers are. Number two â once these companies get the regulation boulder rolling downhill, we know those regulations are going to get more stringent, more expensive â theyâre just going to get run over. These guys are being totally suckered by the greens and by Al Gore.â
One of the myths spread by the soothsayers of global warming doom is that the solutions they propose are good because they are âmarket-based.â For example, liberal Democratic presidential hopeful Hillary Clinton has stated she supported âlegislation to establish a flexible, market-based system to combat global warming.â
â[N]one of this is market-based,â Milloy said. âThis is command and control with just a different dressing on it.â
Milloy reiterated his skepticism that supposed âgreenâ policies are good for shareholders. âYou let me know when they make money,â he said.
âAnd thatâs a good question and I think itâs a fair one too, Steve,â Burnett replied.