skip to content
KKR ESG & Citizenship Report

Invested in Impact

Our impact strategy is built on the responsible investment and ESG work we have been doing for more than a decade.

Content

The KKR Global Impact Fund (“Global Impact”) builds on KKR’s track record of investing in solutions and our history of thoughtful management of ESG issues. Through this strategy, we are seeking to generate private equity risk-adjusted returns alongside social good as the world faces unparalleled challenges, which are even clearer today. Global Impact invests in leading companies where financial performance and positive societal impact are intrinsically aligned. Learn more about the Global Impact Team here and the Global Impact Portfolio here.

HIGHLIGHTS

$7.1 billion

invested in more than 30 solutions-oriented businesses across various KKR businesses since 2010 1

Launched

the Firm's impact investing business in 2018 after a decade of responsible investment leadership

$220 million

deployed by Global Impact in 2019 contributing to the achievement of eight Sustainable Development Goals

Market Backdrop

In 2020, the world faces the most serious global health crisis and economic upheaval we have seen in generations. Moreover, the United States is in the midst of another historical moment: a long overdue reckoning on racial justice. The COVID-19 crisis and tragic murder of George Floyd have highlighted massive racial inequalities in the U.S. health care, economic, and judicial systems. Almost 500,000 lives have been lost globally, and hundreds of millions are unemployed from the impacts of COVID-19. While these statistics are extraordinary, it is difficult to claim surprise. COVID-19 is the third SARS outbreak to threaten public health in the last 20 years. During this same time, we’ve seen outbreaks of H1N1, Ebola, dengue fever, and other zoonoses. Each of these diseases was a threat to our well-being and way of life, and demanded coordinated, proactive efforts.

The United Nations Sustainable Development Goals (SDGs) were created for these exact challenges. As you know, they are designed to mobilize governments, businesses, citizens, technologists, and investors to collectively address the most urgent existing and emerging threats to our interconnected world. Global health is an SDG focus area because it does not simply affect one group or aspect of society; it affects us all. Similarly, climate change, water quality, resource scarcity, the disappearance of work, and cybersecurity are global in their effects. As we work to address the pandemic before us, it is clear we must also redouble our efforts to build companies and systems that better prepare the world for such foreseeable challenges. It is a humbling time to be an impact investor.

Impact Themes and Sustainable Development Goals

As an initiative of the United Nations, the SDGs were developed to recognize that the world’s most important global challenges require mobilization by multiple stakeholders – policymakers, technologists, citizen activists, storytellers, businesses, and investors. Global Impact seeks to find investments that offer solutions to four global challenges: harnessing the Fourth Industrial Revolution, mitigating and adapting to climate change, serving empowered consumers, and building for the future. We believe that by leaning into these thematic areas, we can create value for our investors and deliver meaningfully upon the SDGs.

These four investment imperatives are complex and multidimensional, relating closely to several important SDGs. The below figure illustrates some of the connections between these four impact themes and the SDGs associated with the investments Global Impact made in 2019.

Impact SDG imperatives3

Our Impact Business

Launched in 2018, Global Impact is KKR’s dedicated lower-middle market private equity strategy established to invest in businesses delivering solutions to significant societal challenges.

Learn More

Our Approach to Impact Management

Our process helps us understand, measure, and track the positive impacts that our companies have on the world around them.

Our investment approach for Global Impact employs the same rigorous playbook for investment selection, governance, and value creation as our other private equity investment strategies. Developed and improved during the Firm’s 44-year history, this approach involves working actively with our companies to enhance operations and unlock new commercial opportunities. We believe that as active investors we can achieve better commercial and societal outcomes by working alongside portfolio company management teams.

Assessing and Managing Impact

In addition to aligning with the processes and expectations of our private equity investment process, all KKR’s impact investments will seek to meet the four criteria highlighted below.

Impact criteria2

Reporting on Impact

KKR is committed to measuring and reporting the impact of our efforts in a manner that is transparent and leverages established frameworks. For Global Impact, we will evaluate, measure, and track each portfolio company’s contributions to one or more of the SDGs using indicators defined by third-party reporting frameworks wherever possible. Learn more about the SDGs here.

As part of this, we expect to work with the management teams of portfolio companies to design and implement the appropriate processes to gather the necessary data.

Together with Global Impact portfolio companies, we will define expectations related to the impact of their product or service and assess progress annually against those expectations. Similarly, portfolio companies will track their performance on material ESG issues and report progress over time. This information will be reported to Global Impact fund investors, starting with our inaugural report in 2020.

Partnering for Impact

The power of partnership is foundational to KKR and this belief is no different with Global Impact. We draw on a network of external advisors and partners that we have built during the past 10 years. We leverage these relationships to improve our understanding of trends in our key investment themes and uncover opportunities for impact. In particular, BSR plays a critical role in our impact strategy.

We continue to learn from our partners and our investments, and are committed to enhancing our processes. We respect the efforts and accomplishments of the impact investment community and are committed to learning from and collaborating with our peers.

It is in this spirit that we began evaluating our alignment with the Operating Principles for Impact Management. This set of guiding principles for impact investing was introduced by the International Finance Corporation, a member of the World Bank Group. Learn more about the Operating Principles for Impact Management here. In early 2019, we became a founding signatory and we published our first annual Disclosure Statement in June 2020, available here.

Our Valued Partner: BSR



KKR has engaged with BSR to provide an external perspective on KKR’s impact investments and reporting frameworks. BSR is a global nonprofit organization that seeks to catalyze change within business by integrating sustainability strategies and operations. It also seeks to promote collaboration among companies and their stakeholders for systemic progress toward a just and sustainable world. KKR has been a member of the BSR network since 2010 and has worked closely with the BSR team on multiple ESG-related programs during that time.

With global expertise on a wide variety of sustainability challenges and best practices, BSR is a natural fit for advising KKR Global Impact. We recognize the importance of learning from thoughtful partners as we join the impact investing community and look forward to working with BSR as we continue our journey.

BSR works with the KKR Global Impact team in five key ways:

  1. Collaborates to integrate positive impact into KKR Global Impact’s overall approach,
    including impact criteria, connection to the SDGs, measurement, and transparency
  2. Assesses target investments’ strategic fit and potential relative to KKR’s impact strategy and objectives
  3. Supports KKR’s efforts to measure companies’ performance on material ESG issues and develop action plans to guide improvements
  4. Advises how invested companies can enhance their impact
  5. Assesses portfolio company impacts for inclusion in KKR’s reports to fund investors
1

See Important Information for additional disclosure regarding calculation and determination of solutions-oriented businesses. The core business model, product, or service of a solutions-oriented company provides a solution to an ESG-related challenge and produces strong financial outcomes alongside positive impact.

2

World Meteorological Organization. Published January 1, 2020. https://public.wmo.int/en/medi...

3

World Economic Forum. The Future of Jobs Report 2018. https://www.weforum.org/report...