Kohlberg Kravis Roberts & Co. is joining with the Environmental Defense Fund to create ways for companies to measure and shrink their environmental footprints.
KKR first worked with Environmental Defense Fund when the buyout firm and TPG, formerly Texas Pacific Group, bought energy firm TXU Corp. last year, said Fred Goltz, member and co-head in the energy practice at KKR. Before striking the deal, KKR and TPG approached the Environmental Defense Fund, which was suing TXU in federal court and was behind television ads attacking TXU's proposal to build 11 coal plants in Texas. EDF settled the case and the two buyout firms agreed to withdraw applications for eight out of 11 coal plants in Texas and adopted a slate of initiatives to reduce the company's impact in Texas.
This time, EDF and KKR will work together to develop a set of analytic tools by which companies, including private equity portfolio companies, can assess and track environmental improvements such as reduction in greenhouse gas emissions, waste generation and water consumption.
Once developed, the tool kit will be tested on a small group of KKR portfolio companies in a two- to three-month pilot project that will be expanded across KKR portfolio companies over the next year. EDF and KKR will share the results and the tools.
I think finding win-wins is important, Mr. Goltz said.The cost of poor environmental performance will be more tangible over time, Mr. Goltz said.
Being ahead of that (cost) to measure and manage your environmental performance and starting (now) will serve significant benefits down the road, he said. Arleen Jacobius