KKR's Green Portfolio Program Reaps More than $900 Million

This week, KKR announced impressive results from the firm's five-year Green Portfolio Program: more than 1.8 million metric tons of reduced greenhouse gas emissions and $917 million in combined cost savings and new revenue for portfolio companies since 2008.

The Green Portfolio Program 's powerful trajectory stands as an example of the great things that can come out of a long-term partnership between a nonprofit like the Environmental Defense Fund and an innovative investment firm like KKR. We applaud KKR's continued commitment to increasingly make environmental, social and governance (ESG) management a central part of the firm's investment practices, strategy and methodologies.

Since KKR and EDF launched the Green Portfolio Program in 2008 with just three portfolio companies, the program has reduced water use by 19.5 million cubic meters and trimmed waste by 4.7 million tons, while also recycling nearly 1 million tons of waste. In that time, 25 KKR portfolio companies have participated and 19 companies are currently reporting results.

It's important to note that the program's cumulative financial impact grew more than 40 percent in just one year, a snowballing effect of improved energy and water efficiency, operational improvements and better waste handling. That bodes well for similar programs at other firms to quickly scale and build on early wins.

We are encouraged that other industry leaders are following KKR’s lead and developing rigorous methods for assessing core business activities and operations with an eye to improving environmental outcomes as well as boosting the bottom line. KKR's success makes the case for integrating ESG management into all investment decisions and should become a new best practice for value creation across the industry.

EDF provides a number of resources for any firm interested in building ESG management capacity, including our comprehensive ESG Management Tool, which defines the building blocks of successful ESG management and gives a framework for assessing, analyzing and improving ESG performance.

We also match trained graduate students with companies interested in customized, lasting energy solutions, through EDF Climate Corps.  To date, 32 EDF Climate Corps fellows have uncovered opportunities for private equity firms and their portfolio companies to reduce energy use and save money. Visit our Web site to sign up your company for an EDF Climate Corps fellow in 2014.

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