In New Report, KKR Deepens Commitment to Tackling ESG Concerns

Too often, environmental performance gets labeled as the responsibility of one team within a company – whether that of a dedicated sustainability staff, external or public affairs, legal or compliance, etc. As a result, a company’s staff can often think of environmental and social governance (ESG) issues as what Douglas Adams once famously termed an SEP – Somebody Else’s Problem.


With the release of its 2013 ESG and Citizenship Report, private equity firm Kravis Kohlberg & Roberts (KKR) shows it’s taking a different approach:  KKR has adopted a new global policy that makes identifying and addressing ESG risks in both the pre-investment and investment phases, for its staff, everyone’s problem.

Notably, KKR’s private equity investment professionals are being integrated into the ESG risk assessment process: first, in assessing risks during the diligence phase, and second, working with portfolio companies, consultants and subject matter experts to set performance goals and measure against them during the typical five to seven years a company remains part of its portfolio.

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Raising the Bar for Private Equity ESG Reporting

As the old management adage goes, “what gets measured gets managed.” Private equity firm Apax Partners took an important step toward embodying that concept this spring by releasing a sustainability report rich with key metrics from its portfolio companies' progress in environmental, social and governance (ESG) management.

Apax Partners logo

As last year’s Pitchbook survey showed, ESG management is increasingly a mainstream issue for private equity firms. The detailed data that Apax portfolio companies are gathering — and reporting as a group — form the foundation for companies to manage ESG issues, as well as benchmark and then measure any advances.

This is all part of an important, ongoing shift in the private equity industry: from questioning if firms can create value through ESG management, to how can firms capture the value.

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Harnessing Innovation to Cut Methane Emissions

Murray_TomI believe that Environmental Defense Fund (EDF) is at its best when we are leveraging the power of market leaders to drive innovation and solve environmental challenges.  Over the years we have worked with McDonalds, Walmart, FedEx, KKR and many others to kick start market transformations in sectors including fast food, shipping, retail, private equity and commercial building energy efficiency. Notable initiatives included slashing supply chain greenhouse gas emissions with Walmart, creating a market for hybrid trucks with FedEx, and launching an innovative business internship program to catalyze energy efficiency in business.Notable initiatives included slashing supply chain greenhouse gas emissions with Walmart, creating a market for hybrid trucks with FedEx, and launching an innovative business internship program to catalyze energy efficiency in business. Read more

New Report Shows Path Forward on Cutting Methane Emissions


Environmental Defense Fund was the first environmental group to hire a full-time economist, way back in the 1970s. At the time, many wondered what economics had to do with protecting the environment. We saw an opportunity and seized it because we believe prosperity and stewardship can go hand-in-hand, and solutions that make good business sense have the best chance of catching on and delivering environmental benefits that stick. That idea remains one of our guiding principles today.

So, it should be no surprise that EDF recently commissioned a detailed economic analysis of opportunities to cut methane emissions from the U.S. oil and gas industry. Our objective was simple – show how leading companies can cut methane emissions quickly and cost-effectively.

Why focus on methane emissions, and why now? Because pound for pound, methane is a very potent greenhouse gas – 84 times more potent in the short term than CO2 when released into the air. Whether intentionally vented or inadvertently leaked, methane from the oil and gas sector is America’s largest industrial source of U.S. methane emissions.

It’s a serious problem… but after extensive analysis and discussion with industry leaders and other experts, this study shows us it’s a solvable one. Better yet, it makes a solid case for immediate action.

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EDF named “Trusted Leader” in Inaugural GreenBiz NGO Report

Environmental Defense Fund (EDF) is honored to be ranked by GreenBiz as one of the three trusted leaders among environmental nonprofits, along with World Wildlife Fund (WWF) and The Nature Conservancy (TNC) – truly excellent company.


In its inaugural NGO Report, GreenBiz asked hundreds of sustainability executives from large corporations to rate and rank 30 leading NGOs in terms of influence, credibility and effectiveness. GreenBiz charted the responses and grouped the NGOs in four categories:

  • Trusted Partners – Corporate-friendly, highly credible, long-term partners with easy-to-find public success stories
  • Useful Resources – Highly credible organizations known for creating helpful frameworks and services for corporate partners
  • Brand Challenged – Credible, but not influential, organizations
  • The Uninvited – Less broadly known groups, or those viewed more as critics than partners Read more

PitchBook Survey Highlights Growing Importance of ESG

A recent report by PitchBook is telling on several levels when it comes to the changing state of environmental, social and governance (ESG) management in private equity (PE).

Pitchbook report cover

First, the survey highlights the growth in the number of PE firms, limited partners (LPs) and general partners (GPs) who are engaged on ESG issues. A whopping 84 percent of LPs told PitchBook that ESG is at least somewhat important when deciding whether to invest, and 24 percent said a strong ESG program could outweigh slightly lower historical performance. A majority of GP survey takers (60 percent) have an ESG program at their firm, up from 49 percent last year. Another 26 percent either are developing an ESG program or plan to do so in the near future. This year’s survey included 54 GP and 54 LP respondents, up from last year’s 48 GP and 4 LP respondents.

Then, there's the fact that a prominent industry publication like PitchBook is now regularly reporting on ESG. This is a pretty clear signal that ESG management is now a mainstream issue for private equity.

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Survey Highlights Public Trust in Companies Addressing Climate Change

For nearly 25 years, EDF has been working with the country’s leading businesses – McDonalds, FedEx, Walmart, and others – to improve efficiency, reduce pollution, and drive business value.  Together we have proven that environmental strategy is good business strategy.

Now, a new survey spotlights a less-talked-about benefit to environmental, social and governance (ESG) management: greater public trust. An impressive 82 percent of respondents said their trust in a business would increase if the company provided greater visibility and transparency into efforts to cut down on emissions and mitigate climate change, according to new research conducted by Research+Data Insights on behalf of H+K Strategies and EDF.

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Why EDF Celebrates Walmart's Environmental Gains

Environmental Defense Fund has spent 25 years working to change the way business does business as usual. In a world driven by global commerce, we can't ignore the environmental footprints of corporations.

EDF’s corporate partnerships challenge companies to see things in new ways and develop solutions that benefit both business and the environment, resulting in scalable environmental impacts across industries and supply chains.

An independent contributor to Grist recently highlighted some numbers in regards to our corporate partnership with Walmart. What the article failed to mention was the numbers we should all care about most, the environmental impact of our work.

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Oak Hill Capital Partner’s first ESG report blazes a trail for the middle-market

This week, Oak Hill Capital Partners (Oak Hill) became the first U.S. middle-market private equity firm to publically report on its environmental, social, and governance (ESG) performance.  Another first for Oak Hill and an extension of the ESG trend kicked off by industry leaders – including Carlyle and KKR – over the past few years.

Just last year, Oak Hill and EDF teamed up to demonstrate that opportunities to improve environmental performance were not limited to the mega buyout firms.  We worked together to create a methodology that mapped environmental management opportunities across Oak Hill’s portfolio based on potential environmental impacts, financial results, and management’s readiness to act.

Oak Hill’s new report discusses the firm’s work to expand its ESG efforts and shares its progress to date.  Last December, EDF released a new ESG management tool for the private equity sector.  The Tool is informed by our work in the private equity sector over the past five years and defines the practices needed to build a successful ESG management program.  Many of these best practices have been embedded in Oak Hill’s approach to ESG management and are evident in the firm’s first public report including:

1) Commitment from the top:  Successful ESG initiatives require strong commitment from the top. Oak Hill’s Responsible Investment Policy, ESG related trainings for the firm and its portfolio companies, and the commitment to publically report annually underscore the support for the firm’s leadership and commitment to make ESG management a core part of the way Oak Hill does business.

2) Integrating ESG into due diligence:  Collaborating with BSR to understand the key ESG risks and opportunities of potential investments is admirable, but it’s also smart business.  Just as we’ve seen in our partnerships with other leading private equity firms, integrating ESG into the due diligence process results in opportunities to reduce risks, increase efficiency, and improve performance.

3) Engaging with the right stakeholders leads to results: Private equity firms are increasingly building relationships with key stakeholder groups to gain new insights and improve operations.  Competing private equity firms take notice; three of Oak Hill’s portfolio companies have hosted EDF Climate Corps fellows.  EDF Climate Corps trains graduate students to quickly understand and improve the way organizations use energy by identifying lasting solutions with long-term financial and environmental benefits.  To date, over 30 private equity firms and portfolio companies have tapped in to this program to reduce energy use, cut greenhouse gas pollution, and save money.

In the past few years the private equity sector’s approach to ESG has evolved rapidly and we’ve been hearing from more and more players in the sector, including both asset managers and owners, about how to improve ESG performance.

Oak Hill is continuing to lead the charge in the middle-market.  The secret to Oak Hill’s successful ESG strategy is that there is no secret.

Any private equity firm can do this if they dedicate time and resources to the effort.  Luckily, the next firm to stand up to the challenge will have Oak Hill’s report as a blueprint.

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. Read more