KKR partners with the EDF (Environmental Defense Fund) to create a Green Portfolio of companies working to reduce waste and develop sustainable business practices. Gewn Ruta, Ken Mehlman, David Yarnold, Dean Nelson, and Elizabeth Seeger are featured.
Gewn Ruta, EDF: Over the last 18 months or so, KKR and EDF have been working in a truly unique first of its kind partnership between a private equity Company and an environmental organization. What we’re doing is looking for and finding ways to systematically improve both the environmental performance and the financial performance of the companies that are in the KKR portfolio
David Yarnold, EDF: So the way we came to KKR was quite organic. We were asked to join a history-making deal where KKR and TPG took over a utility, a Texas-based utility .
Ken Mehlman, KKR: And so we sat down after that with EDF and said how do we apply that to other portfolio companies? How do we make that part of our investment process? And the result was this Green Portfolio project.
David Yarnold, EDF: And it was an unprecedented moment for NGO to be part of a business deal.
Ken Mehlman, KKR: It’s now part of how we think about companies, whether we should invest in them, and it’s part of what we think about when we go into the companies: how do we make them better including how do we cut costs and improve their environmental performance?
David Yarnold, EDF: Improving environmental performance means something very specific, it means reducing waste, reducing water, reducing greenhouse gas submissions, using fewer forest products, and fewer specific chemicals.
Dean Nelson, KKR: What we try to do is work with the companies to identify which of these two or three areas they have the largest environmental impact on, and then put in place action plans to reduce that environmental footprint.
Ken Mehlman, KKR: If you can figure out ways to cut costs that are also good from an environmental perspective, it’s a win-win. And that to me is what’s so interesting about this.
Elizabeth Seeger, KKR: Our investors are excited about it, the portfolio companies are excited about it, Environmental Defense Fund is excited about it; there’s really a lot of excitement around this program.
David Yarnold, EDF: And it’s proof that a major private equity firm can drive results not just through one company, but through many companies at once. And in doing that, lift entire industry sectors, which really is the force magnifier effect we’re looking to have with KKR and with this terrific relationship.
