What Happens to Companies That 'Go Green'
Have you heard the one about the company that â€śwent greenâ€ť and ended up actually saving money? Sounds great, doesnâ€™t it?
The problem is the connection between the two is less than certain.
â€ś[T]he mutual fund I manage, the Free Enterprise Action fund, weâ€™re 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€ť Steve Milloy, head of the Free Enterprise Action Fund and webmaster of Junkscience.com, said on CNBCâ€™s October 12 â€śStreet Signs.â€ť
â€śYou know, weâ€™re seeing a lot of bad things come true, Milloy explained. â€śFor 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€ť
â€śWeâ€™ve 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€ť Milloy added.
Although a â€śgreenâ€ť company image has been a popular for marketing, Milloy warned that lobbying for regulation is not in the best interest of many companiesâ€™ shareholders.
â€śHigher 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 havenâ€™t 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€ť
However, â€śStreet Signsâ€ť 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.
â€śWe donâ€™t know the regulation is going to happen,â€ť Milloy said. â€śFirst 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€“ theyâ€™re just going to get run over. These guys are being totally suckered by the greens and by Al Gore.â€ť
One of the myths spread by the soothsayers of global warming doom is that the solutions they propose are good because they are â€śmarket-based.â€ť For example, liberal Democratic presidential hopeful Hillary Clinton has stated she supported â€ślegislation to establish a flexible, market-based system to combat global warming.â€ť
â€ś[N]one of this is market-based,â€ť Milloy said. â€śThis is command and control with just a different dressing on it.â€ť
Milloy reiterated his skepticism that supposed â€śgreenâ€ť policies are good for shareholders. â€śYou let me know when they make money,â€ť he said.
â€śAnd thatâ€™s a good question and I think itâ€™s a fair one too, Steve,â€ť Burnett replied.