Updated with correction
Alternative investment managers are getting serious about environmental, social and governance investing.
Executives at alternative investment manager KKR & Co LP have expanded their ESG program from cutting energy costs at portfolio companies — including changing types light bulbs — to investments in solar energy companies.
Since 2008, KKR's program to improve portfolio companies' eco-efficiency resulted in a total of $1.2 billion in cost savings, according to the firm's July ESG report, which covers 2015.
The combined result avoided 2.3 million metric tons of greenhouse gas emissions, 6.3 million tons of waste and 27 million cubic meters of water use, the report noted.
New York-based KKR is not the only firm to expand its ESG program.
Carlyle Group LP's 2016 ESG report, the latest of its annual reports and also covering 2015, noted carbon emissions was a notable theme last year in that customers of a number of its 200 portfolio companies asked for information on the companies' sustainability practices, including reporting to the Carbon Disclosure Project.
In 2015, 17 of Carlyle's portfolio companies reported data to the CDP, which gathers information on carbon and climate change risk.
Over the past year, all portfolio companies in which Carlyle has a controlling interest reviewed their operations in accordance with Carlyle's responsible investment guidelines, which the firm developed eight years ago.
Carlyle's last two reports have highlighted nearly 30 examples — representing 20% of the firm's corporate buyouts — of sustainability adding value to portfolio companies.
Alternative investment firms are taking ESG more seriously these days, noted David Rubenstein, a co-founder and co-CEO of Washington-based Carlyle Group while speaking at the Pension Bridge Private Equity Exclusive Conference in Chicago last month.