By Dana George
Earlier this week Kohlberg Kravis & Roberts (KKR) released its third annual ESG report, Creating Sustainable Value: Progress through partnership. KKR began managing ESG issues in 2007, in collaboration with the Environmental Defense Fund (EDF), which positions it as an ESG leader in the U.S. private equity sector.
Since 2008, KKR has continued to expand its Green Portfolio Program (GPP), adding more companies each year. With 24 companies enrolled in the program and 16 companies reporting on ESG performance, the GPP has achieved more than $644 million in cost savings and added revenue. The GPP assists companies in identifying key environmental performance areas (KEPA) and helps them systematically employ management practices to reduce energy, water, and waste on year-over-year bases. In addition to driving significant financial returns, managing KEPAs drove these companies to offset 1.2 million metric tons of greenhouse gas emissions, 3.4 million tons of waste, and 13.2 million cubic meters of water. Other 2012 ESG highlights KKR reported include:
- Expanding external partnerships by partnering with the American Heart Association to lead research on employee health;
- Addressing waste issues in KKR’s New York City office; which drove cost savings of nearly $20,000 and displaced approximately 60,000 water bottles from landfills;
- Expanding the GPP’s Vets @ Work program and Responsible Sourcing Initiative
- Developing 18 new industry guides for ESG considerations in the private equity due diligence process
KKR acknowledges that refining ESG management tactics has its challenges; however, approaching these challenges through a lens of continuous improvement has driven compelling results and year-over-year success.