Endnotes

Sustainability-Focused Investments

Includes investments made from 2010 to December 31, 2022 by KKR funds, co-investors and Global Atlantic. Sustainability investments include the following sustainability-focused sectors: climate, environmental sustainability, cybersecurity, lifelong learning (including education and workforce development), and social equality (including financial inclusion and food security).

Portfolio Company-level Board Diversity

The scope of our data collection includes majority-controlled portfolio companies and investment vehicles (where KKR has greater than or equal to 50% ownership) across Private Equity, Growth Funds, Infrastructure, and Global Impact strategies, and select portfolio companies from the following strategies: Energy, Real Estate, Balance Sheet/Stakes, Credit. Board seats are meant to highlight the composition of a specific board. Diverse directors found on multiple boards occupy more than one diverse seat in the portfolio; therefore, one individual can account for multiple diverse seats.

KKR Global Impact’s 2022 Cross-portfolio ESG Performance

Climate

Emissions data includes 16 companies in the Portfolio for 2022 reporting weighted by GIF ownership. 2021 data includes all Portfolio companies except Advanta, Accell, and RES, which were additions to the Portfolio in 2022. 2019 baseline reporting included Axius, BBP, and Burning Glass. We began tracking Scope 3 emissions in 2021, and CMC Machinery, MasterD, Re Sustainability, and Viridor reported for 2021. In 2022, Accell also reported Scope 3 emissions, but Re Sustainability did not. Re Sustainability and Viridor are energy-from-waste companies and represent 98.9% of Global Impact’s total Scope 1 and 2 emissions, as the rest of the Portfolio is largely comprised of office-based businesses. Global Impact has a small equity share in Re Sustainability and Viridor, although overall KKR holds a control position via co-investments. Global Impact is actively involved in developing sustainability-focused strategies at both companies; for example, the recruitment of ESG expertise at the board and executive level and supporting Viridor’s net-zero and net negative strategy.

Human Capital

Senior leadership and employee diversity, equity, and inclusion (DEI) is monitored as follows: APAC and EMEA include gender diversity; in North America, in addition to gender diversity, the term diversity encompasses individuals self-identifying as African American, Black, Hispanic, Latino, Native American, Alaska Native, or Asian American. Metric is portfolio-wide average based on self-reported company data.

Job creation and employment data reflect full-time employees only. Job creation excludes jobs gained from acquisitions and only includes with at least two years of employment data, i.e., the 13 companies included in the 2021 Global Impact Report.

KKR Global Impact Strategy: Highlights of Global Impact’s Contribution to the SDGs

The figure is for illustrative purposes only. The illustrations include all 13 SDGs addressed by Global Impact in 2022 and at least one finalized metric per company in our Global Impact portfolio, but do not include all metrics for every company. The majority of results are cumulative contributions to the SDGs since baseline, and SDG metrics with percent values expressed as most recent result for 2022. All figures are rounded totals.

SDG 1: No Poverty

Five Star: Total loans disbursed by Five Star to its micro-entrepreneurs and self-employed individual clients in India over the course of KKR’s investment.

SDG 2: Zero Hunger

Advanta aims to increase access to high quality seeds for smallholder farmers. The volume of the seeds sold are the actual numbers pulled from Advanta’s projections and sales monitoring tool.

SDG 4: Quality Education

Lightcast: Metric captures the total number of higher education institutions served by Lightcast’s solutions. Metric counts all institutions served with a subscription product (either directly or through a group consortium) as of year end 2022.

Graduation Alliance: Total students enrolled in Graduation Alliance’s Adult Workforce Diploma and Dropout Recovery Programs in 2022. Both programs aim to engage former high school dropouts to earn credits towards a high school diploma.

MasterD: Students served in Spain and Portugal as of 2022.

Education Perfect: Number of students with access to Education Perfect’s platform at the end of 2022.

EQuest: Metric reflects number of students in EQuest’s portfolio as of 2022.

SDG 6: Clean Water and Sanitation

Axius Water offers end-to-end nutrient management solutions for municipal and industrial wastewater treatment facilities to reduce the harmful effects of biological nutrient pollution. Daily volumes of nutrient chemicals removed are calculated based on the treatment capacity for each product or process provided by Axius Water over the life of KKR’s investment.

SDG 7: Affordable and Clean Energy

BBP provides energy-saving solutions to HVAC systems in commercial and industrial buildings. BBP calculates the percentage change of total customer HVAC system’s energy intensity before and after BBP’s solution was implemented. The result is an average of energy intensity improvements across client projects in 2022.

SDG 8: Decent Work and Economic Growth

Citation provides health and safety, human resource, and compliance support (through expert advice, internationally recognized quality standards, e-learning modules, guides, templates, etc.) to small and medium-sized enterprises across the United Kingdom. This metric reflects 2022 performance and was calculated by comparing the Injury Incidence Rate per 100,000 employees at Citation’s health and safety clients with the 2022 UK average, sourced from the UK Health and Safety Executive.

SDG 9: Industry, Innovation, and Infrastructure

Refer to SDG 7 BBP endnote. SDG 9 metric captures the CO2 equivalent reduced due to energy efficiency savings generated at BBP’s clients over the life of KKR’s investment.

SDG 11: Sustainable Cities and Communities

Re Sustainability is a waste management company that collects and treats municipal solid waste. Viridor is a waste management company that treats municipal solid waste. Metric is the total metric tons of waste treated since baseline for Re Sustainability (2019 baseline) and Viridor (2020 baseline). Beginning in 2022, Viridor no longer separately tracks the amount of municipal solid waste treated, but instead tracks the amount of waste processed by Energy Recovery Facilities (ERFs). Based on third-party research, Viridor conservatively estimates that 62% of waste processed in the ERFs is municipal waste.

SDG 12: Responsible Consumption and Production

Reflects metric tons of hazardous waste treated by Re Sustainability since baseline (2019), such as hazardous waste.

CMC installs and operates 3D packaging machines, which scan products to produce packaging that fit to product size, supporting retail and logistics clients to reduce corrugate and filler materials on millions of packages shipped. We updated the 2022 methodology to include LCA results for both CartonWrap and Genesys products to have more accurate impact metrics estimation. The estimated reduction in paperboard and associated emissions is for calendar year 2022 and is based on a LifeCycle Assessment (LCA) conducted in 2021 for the Carton Wrap product and a LCA completed in early 2023 for the Genesys product. The LCAs compared the paperboard and void filler used by a standard packaging process with its products across either a selection of household items or a selection of different size order.

SDG 13: Climate Action

GreenCollar is a leading carbon markets business in Australia and one of the largest carbon abatement developers globally. Australian Carbon Credit Units represent one metric ton of stored carbon dioxide equivalent (tCO2-e) or avoided emissions through approved management activities and methodologies, which is calculated by using a methodology defined by Australia’s Clean Energy Regulator and independently audited.

To calculate the total estimated metric tons of CO2 savings associated with the company, Accell has estimated life cycle emissions across a range of bike models, divided this by average km of use for bikes, calculated a delta for these emissions per KM against other modes of commuting, such as bike, bus and train, and multiplied this CO2/km delta by the estimated number of kms for each mode of transport that have been substituted by an e-bike after the purchase of an Accell e-bike. Data was captured from consumer research.

SDG 14: Life Below Water

GreenCollar provides Reef Credits where one Reef Credit is equivalent to 1 kilogram (kg) of dissolved inorganic nitrogen pollution or 538 kg of sediment prevented from reaching the Great Barrier Reef, as a result of more sustainable farming practices via GreenCollar’s engagements with farmers. Performance is shown over the life of KKR’s investment.

SDG 15: Life On Land

Calculated as sum of land in which GreenCollar is involved in carbon projects in 2022. This only includes registered and credited projects — the total hectares of land that Green Collar is involved with is larger as it typically takes a year or more of engagement to then become credited. While all projects are likely generating environmental outcomes, given the area of land is an output rather than outcome metric, it was decided that monitoring registered/credited projects is a more conservative approach.

This metric is based on the number of acres under an easement, deed restriction or environmental covenant in 2022 and reflects the acres of land restored and protected by RES through its ecological restoration services, including environmental mitigation, storm water and water quality, and climate and flooding resilience in 2022.

SDG 16: Peace, Justice, and Strong Institutions

KnowBe4 monitors employee susceptibility to simulated phishing security tests before and after implementing their solution. This metric combines an estimated user count developed by KKR, a pre- and post-training phishing click rate published by KnowBe4, and multipliers from third-party literature relating to malicious emails opened, data breaches and average exposed records over the life of KKR’s investment.

KKR-level ESG Data Tables: Emissions by Scope

KKR’s 2022 GHG emissions footprint is developed in accordance with the revised GHG Protocol Corporate Standard and the Corporate Value Chain Accounting and Reporting Standard. We believe the procedures developed and executed during development of the KKR Inventory for Reporting Year 2022 satisfy ISO Standard 14064-1. Scope 3 categories include:

Category 1: Purchased goods and services (office related materials, meetings and events)
Category 3: Fuel- and energy-related activities
Category 5: Waste generated in operations (office consumables, water and sewer)
Category 6: Business travel (commercial air travel, car service and rental, private jet, hotel)
Category 7: Employee commute (physical commute, remote work)