KKR, the New York-listed private equity titan with $83.5bn (€61m) in assets, says a programme it has had in place since 2008 to improve the environmental performance of its portfolio firms has made around $917m in accumulated costs savings and added revenue.
The plan, called the Green Portfolio Program, has also helped to avoid more than 1.8m tonnes of greenhouse gas emissions, 19.5m cubic meters of water use and 4.7m tons of waste since inception, KRR said.
The program, launched in partnership with environmental advocacy group Environmental Defense Fund (EDF), uses an “environmental lens” to assess KKR’s portfolio companies. Fellow private equity giant Carlyle has a similar system in place called EcoValuScreen.
KKR founder Henry Kravis said: “We’ve shown that responsible investing can also be smart investing. We are working to change how companies do business, helping them save money through efficiencies while improving the environment and positively impacting the communities where they operate.”
The programme currently has 25 companies enrolled, of which 19 report results.
For example, portfolio company Del Monte, the food group, has avoided 10,800 metric tons of GHG emissions and recycled 236,000 tons of waste – at an estimated financial impact of $9.6m.More detail on the methodology behind the calculations is available here and there is a frequently asked questions section here.
The EDF said it was important to note that the program’s cumulative financial impact grew more than 40% in just one year – “a snowballing effect of improved energy and water efficiency, operational improvements and better waste handling”. It bodes well for similar programs at other firms, the EDF said.
“We’ve shown that responsible investing can also be smart investing” – Kravis
Elsewhere in the sector, the British Venture Capital Association (BVCA) presented its Responsible Investment Awards, designed to recognise private equity houses that have made a notable commitment to the ESG agenda, at its annual conference yesterday. RI was a media partner for the awards.
In the category for ESG engagement with portfolio companies, the winners were Palatine Private Equity and Carlyle. Palatine who also won in the category for demonstrating an ESG framework alongside HgCapital. A special judges award went to Doughty Hanson.