Tools and resources for private equity
Kohlberg, Kravis & Roberts: Green Portfolio Program
Since 2008 we have been working with KKR to improve the environmental and financial performance of their global portfolio of companies. This year, thirteen companies in the U.S., Asia and Europe are reporting results in three key performance areas: energy, waste and water. Collectively, the companies have achieved significant savings and environmental improvements through energy efficiency, waste handling and process improvement initiatives totaling: $365 million in operating costs, 810,000 metric tons of greenhouse gases, 2.2 million tons of waste and 300 million liters of water.
|Company||Environmental Impact||Financial Impact|
|Accellent||1,700 metric tons of GHG emissions||$145k|
|ATU||5,100 metric tons of GHG emissions
105,000 tons of waste recycled
|Biomet||7,000 tons of GHG emissions||$2.2M|
|Dollar General||386,000 tons of GHG emissions
19 million cubic yards of waste
|First Data||15,400 metric tons of GHG emissions||$1.3M|
|HCA||107,000 metric tons of GHG emissions||$1.3M|
|Oriental Brewery||40,000 metric tons of GHG emissions||$5.3M|
|Pets at Home||3,400 metric tons of GHG emissions
4,000 tons of waste
|Sealy Corporation||35,000 metric tons of GHG emissions
6.3 million lbs. of waste
|SunGard||70,000 metric tons of GHG emissions||$10.8M|
|Tarkett||6 metric tons of GHG emissions
5,000 tons of waste
300 million liters of water
|U.S. Foods||142,000 metric tons of GHG emissions||$30.6M|
|WILD Flavors||810 metric tons of GHG emissions
586,000 kilograms of waste
29,000 cubic meters of water
|GHG emissions||810,000 metric tons||$365M|
|Waste||2.2 million tons|
|Water||300 million liters|
For more information on each company’s initiatives and our methodology, please visit KKR’s Green Portfolio Program website.
The Carlyle Group: EcoValueScreen
In March 2010, Carlyle and EDF announced the creation of EcoValuScreen, a new environmental due diligence framework that identifies opportunities for operational improvement and value creation through enhanced environmental management at potential investments. EcoValuScreen expands environmental due diligence beyond its traditional focus on downside risk to identify upside opportunities for operational enhancements that will lead to better environmental and financial performance. Carlyle is using this approach to more effectively evaluate the operations of a target company, identify the most promising environmental management opportunities and incorporate them into the post-investment management, governance and reporting plans of its controlled portfolio companies.
To date, EcoValuScreen has been applied to several new U.S. investments including NBTY, Inc. and Park Water Company, and has identified over a dozen net present value (NPV) positive opportunities to improve environmental performance.
Oak Hill Capital Partners
Oak Hill Capital and EDF created a methodology to map companies according to environmental metrics, financial opportunities, and management readiness in order to focus on those that are capable of making the greatest impact. Their goal is to improve environmental performance at Oak Hill Capital portfolio companies and create a model that can be used by other middle-market firms to find environmental opportunities in their own portfolios.
Based on the methodology that Oak Hill Capital and EDF developed, the pilot focused on Dave & Buster’s, a leading operator of high volume entertainment/dining complexes; Jacobson Companies, the Des Moines, Iowa-based transportation and logistics firm; and ViaWest, one of the largest privately held data center, cloud computing, and managed service providers in North America. To date, solutions have included initial investments in lighting, climate controls, and other energy-intensive operations in the companies’ restaurants, warehouses, and data centers.
The pilot, which focused on a select number of these companies’ facilities, identified more than $700,000 in annual energy cost savings and an annual CO2 emissions reduction of 2,900 metric tons. This early progress is equivalent to taking 570 cars off the road every year. Oak Hill Capital and EDF plan to use these pilot results to implement broader programs in these companies.