KKR Releases New ESG Report and Global ESG Policy
Thursday, July 31, 2014
KKR is committed to responsible investment in our operations as we have seen how our decisions can affect companies, communities, and individuals. We believe that by including environmental, social, and governance (ESG) considerations in our investment decisions, we are smarter, more conscientious investors.
As we continue growing our focus on responsible investment in Asia and globally, we are pleased to share with you KKR’s fourth ESG Report. The report is also available electronically at www.kkresg.com.
This report covers the 2013 calendar year, along with select forward-looking initiatives for 2014, and focuses on what we consider to be our most material ESG issue: how ESG considerations are integrated throughout our investment processes. During the past six years, three themes have proven consistently important: the power of private equity, the value of partnerships, and the benefits of focusing on performance.
Highlights from the 2013 report include:
- In late 2013, 19 of the private equity portfolio companies participating in KKR’s Green Portfolio Program – which includes BIS Industries, Bharti Infratel and Dalmia Cement in Asia Pacific – reported results. Since the program’s launch in 2008, reporting companies have avoided 1.8 million metric tons of greenhouse gas emissions and achieved more than $917 million in financial impact (cost savings and added revenue) through a variety of eco-efficiency efforts (pg 27). We aim to add a new portfolio company from Asia to the GPP in the coming year.
- We developed a formal KKR Private Equity ESG Policy that not only codifies our work to date, but also serves to align the firm to ensure we are moving forward on our ESG efforts most effectively. The policy demonstrates to our external partners and the public at large where we stand and what we mean in reference to ESG management. Our investments in companies such as Gland Pharma, Panasonic Healthcare and Weststar were among the first under this policy (pg 20).
- KKR is committed to being a global solutions provider and has businesses that address various societal problems in areas such as waste management, water infrastructure, food safety, and raw-material sourcing. A key example was our purchase of Australian sandalwood producer Santanol, a company aimed at combatting deforestation and promoting sustainable timber production (pg 26).
- Members of KKR offered pro-bono technical assistance to East Bali Cashews, a social enterprise in Indonesia, that allowed the company to raise funding, scale production and provide employment to villagers, many of whom are women with historically limited options for steady employment (pg 17).
Moving forward, KKR is committed to leveraging our ESG track record and continuing to focus on partnerships that add value to our investments, while also increasing environmental and social benefits. We will also continue looking outside of private equity to determine how to integrate ESG considerations into other asset classes.
We welcome your feedback and partnership on these critical issues going forward, and strongly encourage you to share any thoughts or questions that you may have by contacting me or Steve Okun, Director of Public Affairs for KKR Asia Pacific (steven.okun@kkr.com).
