US mega-firm Kohlberg Kravis Roberts, which recently signed on to a set of socially responsible investment guidelines, says that a recent partnership with the Environmental Defense Fund to make three portfolio companies – US Foodservice, PRIMEDIA and Sealy Corporation – more environmentally friendly saved $16.4 million in 2008.
Since May of last year, KKR and the EDF have worked to develop a set of tools and procedures to help companies improve in areas like greenhouse gas emissions, waste, water and forest resources. Among the procedures implemented by KKR’s three portfolio companies, US Foodservice saved $8.2 million by improving its fleet productivity while PRIMEDIA saved $2.9 million in material costs by reducing paper consumption. Sealy saved $1.2 million in fuel costs by reducing waste and decreasing greenhouse gas emissions.
KKR will pursue similar green strategies in 2009 across its US portfolio, including Accellent, Biomet, Dollar General and HCA.
The firm last week was one of several major private equity players who signed on to guidelines formed by the Washington, DC-based lobbying group Private Equity Council that called for increased consideration of environmental, public health, safety and social issues associated with target companies.
Other PEC members include Bain Capital, TPG, Permira, The Blackstone Group, Apollo Global Management, The Carlyle Group and Apax Partners. A PEC spokesman said the recommendations represent a commitment to work with company management and investors to make the company better, although they don't bar investment in any company or industry.
KKR’s embrace of environmentally and socially responsible investment comes as it is increasing its public profile and image-building efforts ahead of a planned listing this year. In the last year, the formerly low-key firm has put more information up on its website, hired several high-profile executives to run communications and created a global public affairs division.
At a recent private equity conference, senior KKR advisor George Fisher said the industry needs to better publicise the benefits it brings to the business world to improve its image.