While many of our portfolio companies face unique sustainability challenges or opportunities — just as they face unique operational or financial issues — some issues do span multiple sectors. When there are common issues, we see a particular opportunity to build “communities of best practice” on shared challenges and to learn from the expertise within our own portfolio. Some of our most effective thinking on these issues has come from our portfolio companies, many of which were leaders on sustainability issues before we made investments and from which we and other companies are able to learn.
A Greener Portfolio
In 2008, we officially developed a partnership with Environmental Defense Fund (EDF), a leading national nonprofit organization, following our successful collaboration during the acquisition of TXU, now Energy Future Holdings, in 2007. Today, our partnership with EDF has grown into our Green Portfolio Program and is driving environmental innovation and business improvements across our global portfolio.
The KKR Green Portfolio Program continues to deliver a financial and environmental impact. The results issued in December 2011 marks the third time that the program has announced progress from its participating private equity portfolio companies. Since its inception in 2008, 17 portfolio companies have taken part in the Green Portfolio Program. Thirteen of the participating KKR portfolio companies released results in 2011. Collectively, through their efforts in key areas, these companies have achieved more than $365 million in financial impact and avoided 810,000 metric tons of GHG emissions, 2.2 million tons of waste, and 300 million liters of water. Additional details on the Green Portfolio Program and specific company initiatives can be found at http://green.kkr.com and www.edf.org/greenreturns.
Responsible Sourcing
In today’s global economy, it can be increasingly challenging for companies to ensure that their — and their customers’— expectations for sustainability performance are met by their suppliers in distant locations. In addition to having potential unacceptable human rights or environmental consequences, suppliers’ failure to achieve these expectations can result in operational risks that affect customer behavior or product reliability.
Recognizing that we have a unique opportunity to partner with our portfolio companies on this issue, in 2010, we launched our Responsible Sourcing Initiative to help our portfolio companies work together with us to develop effective tools to address this shared challenge. To enhance this effort, we partnered with BSR (Business for Social Responsibility), a leading nonprofit organization with expertise in supply chain sustainability that works with a network of more than 250 member companies.
