KKR: Green initiative saves $160m

Kohlberg Kravis Roberts’ Green Portfolio Programme has saved eight portfolio companies $160 million in operating costs, the firm said Thursday.

The eight portfolio companies have cut $160 million in operating costs, 345,000 metric tons of CO2 emissions, 8,500 tons of paper, and 1.2 million tons of waste, said Elizabeth Seeger, manager of the Green Portfolio Programme, in a conference call.

The participating portfolio companies are: Accellent, Biomet, Dollar General, US Foodservice, PRIMEDIA, Sealy, and SunGard Data Systems.

The programme was launched in 2008 with the Environmental Defense Fund, and aims to help KKR portfolio companies cut costs by becoming more energy efficient.

We have been actively engaging other leaders in this sector. We want to make it a new industry standard, and the response has been incredible. Tom Murray

Seeger said this is only the beginning as KKR is looking to expand the programme to include more portfolio companies and develop more tools.

“Over the last few months we’ve been working on a data collection tool for portfolio companies to log on and upload their data on a quarterly basis. We will then create more frequent reports,” Seeger said.

Tom Murray, managing director for corporate partnerships at EDF said the organisation has had discussions with several other private equity houses. EDF has also signed on Carlyle to a similar programme.

Carlyle, working with EDF and environmental consultant The Payne Firm, examined more than 320 current and former portfolio companies to identify opportunities to generate savings and minimise environmental impacts in areas like greenhouse gas emissions, waste management, water use, priority chemicals and forest products.

“We have been actively engaging other leaders in this sector. We want to make it a new industry standard, and the response has been incredible. When you have a sector like the private equity sector that employs thousands of people you have a lot of scale and leverage,” said Murray in a conference call.

KKR’s programme has expanded to include roughly 20 percent of the companies in KKR’s global private equity portfolio, including: First Data Corporation, HCA, Lehigh Phoenix, Oriental Brewery, and Tarkett.

EDF envisions middle market players adopting green strategies.

“I don’t think it necessarily matters if you’re a mega buyout firm or a middle market firm. It’s a great fit for the sector as a whole,” said Murray.