A Complex Future:
Managing Resource Constraints
As the world continues to experience population growth and demographic shifts, the demand for countless natural resources – including food, water, oil, metals, and timber – is expected to rise. However, it is not just natural resources that are constrained; many companies face employee shortages and talent gaps. To succeed in this environment, businesses will need to do more with less, create extremely efficient supply chains and manufacturing operations, and focus on hiring talent who can spur innovation and productivity.
Improving Supply Chains: Responsible Sourcing Initiative
Poor supply chain management can result in human rights violations, environmental consequences, and supply chain disruptions. With this knowledge, since 2010, we have focused on evaluating risks and opportunities in the management of the global supply chains of our relevant private equity portfolio companies.
The Responsible Sourcing Initiative (RSI), one of our proactive ESG programs, was launched in partnership with Business for Social Responsibility as a way to address these risks by assessing company practices and providing guidance to improve management of these issues in global supply chains.
To date, KKR has engaged with nearly 30 companies via sourcing program assessments. The program has provided an even greater number of portfolio companies access to applicable tools, training on trends and best practices, and customized guidance and support. In addition, responsible sourcing is featured in the annual chief procurement officer conferences convened by KKR Capstone.
Solutions for a Resource-Constrained Future
Recently, we have begun investing in companies that are rethinking the way they do business in light of a resource-constrained future.
People: The Ultimate Resource
Engaged, smart people are a company’s greatest asset. Recognizing the need to be employers of choice so that we remain innovative and competitive, the Firm and many of our portfolio companies are evaluating and improving our talent management strategies.
We are deeply committed to ensuring that we are a firm that attracts, develops, and retains the best possible talent through:
- A focus on increasing diversity and inclusion
- Offering leading benefits and resources
- Investing in training and development of our employees
Within our private equity portfolio, we have two major initiatives designed to expand access to workforce talent: our proactive ESG program Vets @ Work and efforts to accelerate diversity within management teams and workforces.
Accelerating Diversity at Portfolio Companies
We seek to provide guidance and resources to our portfolio companies as they advance their efforts to drive diversity within their management and work forces.
Research studies and think tanks have shown that a focus on diversity at the management and board of director levels can improve a company’s quality of decision-making, productivity and innovation, and profitability. In 2015, we convened discussions with diversity experts, included panels at our portfolio company conferences, and assessed our public companies’ boards of directors for gender diversity. In 2016, we plan to continue to evolve our views on diversity and work to better connect our companies to best practices and thought leaders on this timely topic.
Although the demands on the world are continually increasing, the natural resources required to support this growth are often finite and the human resources required are becoming less well-matched and more selective. Adapting to this landscape through comprehensive talent management, increased product innovation, and strategic resource management plans can help drive solutions by and for business.