Green Partnership Blooms Between Leading Private Equity Firm and Environmental Defense Fund

Green Partnership Blooms Between Leading Private Equity Firm and Environmental Defense Fund

A “Green Portfolio” partnership between the Environmental Defense Fund (EDF) and Kohl Kohlberg Kravis Roberts & Co. L.P. (KKR) was announced on May 1st that will measure and improve the environmental performance of companies within KKR’s U.S. portfolio. EDF is a nonprofit organization dedicated to protecting environmental rights that works to identify environmental problems and create solutions. KKR, on the other hand, is one of the world’s largest private equity firms that completes complex buyout transactions. As noted on EDF’s website, this “partnership is the first of its kind between a private equity firm and an environmental organization.”
 
EDF’s press release reports that “KKR has committed to work with EDF to develop a set of analytic tools by which companies can assess and track improvements on a series of environmental metrics. These tools will enable managers to cost-effectively improve efficiency, reduce waste and address environmental impacts, such as greenhouse gas emissions, the use of toxic substances, waste generation or water consumption.” A related story in the New York Times observes that KKR’s “decision to embrace environmental issues could have far-reaching implications for business operations and might put pressure on its top rivals to follow suit.”
 
It will be interesting to see the results of this partnership, and what effect, if any, improving the environmental performance of KKR’s companies will have on KKR’s bottom line.
 
The EDF’s Press Release, Kohlberg Kravis Roberts & Co. and Environmental Defense Fund Announce First-of-Its-Kind “Green Portfolio” Partnership, is available at http://www.edf.org/pressrelease.cfm?contentID=7870.
 
For the NY Times article, see Felicity Barringer & Andrew Ross Sorkin, Promient Green Group to Help Buyout Firm, N.Y. Times, May 1, 2008, available at http://www.nytimes.com/2008/05/01/business/01enviro.html?_r=1&scp=1&sq=Kohlberg%20Kravis&st=cse&oref=slogin.