KKR adds First Data to green portfolio programme

Source: KKR

Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, KKR) today announced a significant expansion of its Green Portfolio Program beyond the United States and now covering approximately twenty percent of KKR's global private equity portfolio.

KKR also announced the hiring of Elizabeth Seeger from the Environmental Defense Fund to manage the expansion of the Green Portfolio Program and other responsible investment efforts.

The Green Portfolio Program, developed in partnership with the Environmental Defense Fund (EDF), now includes four additional companies: First Data, based in Atlanta, GA; Lehigh Phoenix, a division of Visant, based in Armonk, NY; Oriental Brewery, based in Seoul, Korea; and Tarkett, based in Nanterre, France. As participants, these companies will be building on current sustainability initiatives by evaluating their environmental performance and setting goals related to their key environmental impacts.

"The business case for environmental management has never been stronger. The Green Portfolio Program highlights that environmental performance and business performance can go hand-in-hand. We are very excited about the momentum to date and the fact that we have taken this effort global in such a short period of time," said Henry Kravis, Co-founder of KKR.

Since May 2008, KKR and EDF have been developing and testing a set of analytic tools and metrics to help companies improve in several key environmental performance areas, including greenhouse gas emissions, waste, water, forest resources, and priority chemicals. These tools help managers to cost-effectively improve efficiency and reduce waste, while addressing the environmental impacts of their business.

First Data, Visant, Tarkett, and Oriental Brewery join eight other Green Portfolio participants and together now account for approximately 20 percent of KKR's private equity portfolio companies.

The pilot phase of the project yielded successful results for U.S. Foodservice Inc., PRIMEDIA Inc. and Sealy Corporation, which together already saved $16.4 million and prevented more than 25,000 metric tons of greenhouse gas emissions in 2008. Data are being collected for Accellent Inc., Biomet Inc., Dollar General Corporation, SunGard Data Systems Inc., and HCA Inc., and certain preliminary results for these companies are expected to be released in Spring 2010.

The new participants create two "firsts" for the KKR Green Portfolio Program. Oriental Brewery and Tarkett represent the first step in expanding the program globally. Oriental Brewery, added to KKR's portfolio in July, 2009, is the first company to participate within six months of KKR's initial investment.

KKR also re-launched a Green Portfolio Program public website that provides updates on the program as well as additional information on KKR's responsible investment efforts.

Building Internal Resources for Responsible Investment

In addition, KKR expanded its commitment to responsible investment. Elizabeth Seeger, a former two-year fellow in the Environmental Defense Fund Corporate Partnerships Program, recently joined KKR's operations team, KKR Capstone. She will leverage the operational expertise of the KKR Capstone team to drive environmental benefits and cost savings to KKR's portfolio companies and will oversee the sharing of environmental and social responsibility best practices across KKR's portfolio. Her responsibilities will include the development of reporting systems as part of KKR's compliance with responsible investment guidelines.

"Elizabeth helped spearhead our partnership with EDF and she was instrumental in getting the pilot project off the ground. We believe that the focus and expertise Elizabeth brings will further our efforts to generate sustained value for our companies and investors while at the same time improving the environment," said Ken Mehlman, Head of Global Public Affairs and a Member of KKR.

The addition of Ms. Seeger is consistent with KKR Capstone's recent hiring of other subject matter experts to work across the portfolio in the areas of Lean Six Sigma, procurement, and information technology. KKR Capstone executives work side-by-side with management teams to help identify and implement operational improvements in functional areas such as pricing, organizational design, sales force effectiveness, and operational efficiency.

Dean Nelson, founder of KKR Capstone, said, "Our work over the last two years has proven that environmental performance management aligns well with our long-held belief that value is created by improving the operations and performance of the companies in which we invest."

In an effort to provide information to companies in a one-stop-shop manner, KKR is in the process of building an internal website where its portfolio companies will be able to report and manage data and access case studies and best practices for cost-effectively improving environmental performance.

To expand its citizenship efforts, KKR recently joined Business for Social Responsibility (BSR) to ensure access to best practices and research surrounding environmental and social issues globally.

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