Private equity titan KKR, Kohlberg Kravis Roberts, has invested $1.6bn into renewable energy, including solar, wind and district heating projects, since it first started producing its annual ESG and Citizenship report in 2011, with a further $400m dedicated to water infrastructure in that time.
KKR has been targeting companies that are creating or utilizing technology that will enable the smooth transition to a carbon-constrained economy, for the past five years, the new 2015 edition of its ESG report says. It is also seeking “additional investment opportunities” in similar renewable projects going forward.
Deals include its $3.1bn Global Infrastructure Investors II fund taking an 80% stake in Gestamp Asetym Solar now known as X-ELIO.
Other projects which KKR has backed in the name of ESG include wind energy providers Temporis Capital and ACCIONA Energia Internacional, solar provider SunTap Energy II, and French energy-efficient heating firm Coriance. Though under KKR the French firm’s renewable energy production grew from 34% to 60% of its total output in three years, its stake has since been acquired by First State Investments.
Company co-founder Henry Kravis presented the report at the Hong Kong’s Women’s Foundation’s 30% Club lunch yesterday.KKR – which was commended in the RI Reporting Awards for Asset Managers in June this year – is also currently analysing all of its private equity holdings to determine how they may be affected by the physical impacts of climate change, climate-related regulatory changes, international agreements and investor sentiment, with a portfolio-level assessment to be completed by 2016.
In what is its sixth annual ESG and citizenship report, the investment firm also outlines five societal challenges relating to ESG issues that it says are driving its investment decisions, and how it hopes to address them by backing companies that focus on adaptation or innovation. After adapting to climate change, the most pressing challenges are supporting better agriculture, treating and preventing disease, investing in urban infrastructure and managing resource constraints in the future.
KKR’s Global Head of Public Affairs, Ken Mehlman, who heads up the firm’s ESG push, said that as an investor his firm has an opportunity to provide part of the solution to such critical, global challenges and to be a good steward of companies that shared those aims.