Sustainable Innovation Platform

Supporting Sustainable Innovation at KKR

The needs of companies in our portfolio continue to change with the world around them. The support we provide has evolved to reflect this fact as well as the dynamic nature of the companies that make up our portfolio. In late 2016, we began evaluating how to enhance our proactive ESG programs to better support sustainable innovation. We will continue to offer companies access to a range of best practices, trusted experts, tested resources, and a nuanced understanding of the issues that are most relevant to them.

Through our sustainable innovation platform, we engage with our companies on topics that range from eco-efficiency and eco-innovation to responsible sourcing and healthy workforces. We have also offered resources and experts on issues such as data privacy, crisis management, and labor relations. Our offerings will continue to adapt with the challenging environment in which our businesses operate.

Our Model for Value Creation

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Green Portfolio Program

An environmental initiative that was transformational for the private equity industry at the time of its launch in 2008 in partnership with Environmental Defense Fund. We announced Green Portfolio Program results annually, including the final eco-efficiency results announcement of 25 portfolio companies collectively achieving $1.2 billion in financial impact and benefits in a series of environmental metrics from 2008 to 2014. Learn more at green.kkr.com/history.

In 2015, the Green Portfolio Program was redesigned as the Green Solutions Platform.

Responsible Sourcing Initiative

A global initiative through which we analyze existing company policies and procedures and provide resources to improve human rights and environmental management in supply chains. As of today, we have worked with approximately 30 companies in our private equity portfolio to review their procedures for sourcing practices and possible supply chain risks. We develop action plans where we identify a need for improvement.

Vets @ Work

A U.S.-based initiative aimed at recruiting, hiring, and retaining veterans across our U.S.-based portfolio companies. Since 2011, KKR’s participating Vets@Work companies have hired nearly 48,300 veterans and military spouses. The objectives of the program are to highlight the talents and leadership abilities veteran hires can bring to private sector employers. We support the continuation and expansion of existing veteran hiring programs as well as encourage the formation of new formal veterans hiring programs. We deploy tactics such as webinars, 1:1 conversations, and in-person events. In 2016 and 2015, we convened portfolio company leaders for the Veterans Initiative Summits to expand their efforts. We also connect portfolio companies to internal and external experts to share best practices.

Wellness Works

A U.S.-based incentivized, workplace-based, wellness initiative designed to engage employees on their biometric health scores and provide resources to help them address risk factors for cancer and cardiovascular health, including smoking, obesity, hypertension, and diabetes. It is based on the premise that employees who know their key health indicators are able to make better decisions for their health and ultimately improve their well-being. This program also supports a community of best practice sharing between engaged portfolio companies. Wellness Works was launched in 2011 with the guidance of the American Heart Association (AHA). To date, the U.S.-based program has engaged more than 250,000 employees at 10 companies.

Integrity and Engagement

A global approach in which we provide guidance on voluntary codes and frameworks of transparency that help drive anti-corruption and anti-bribery best practices. We encourage our private equity portfolio companies to enhance engagement with their stakeholders by educating them about the voluntary codes and frameworks of transparency. Since 2011, we have supported these efforts through a series of webinars on relevant topics, such as best practices in environmental, social, and governance (ESG) and sustainability reporting, how to assess issue materiality, and overviews of existing and emerging standards for sustainability communications. In 2012, we launched a partnership with Transparency International (TI), a global anti-corruption NGO. Through this partnership, we seek to enhance our private equity investment and company management processes, specifically in business integrity.

Worker Safety

A global effort, launched in 2015, built on a proprietary Worker Safety Guide that is made accessible through webinars and in-person trainings. The handbook illustrates the foundational elements of an effective management system and is designed to highlight opportunities for continuous improvement in health and safety performance. We expect to continue this effort in the years to come.

Green Solutions Platform

Through this global effort, we identify, support, and highlight environmental initiatives at KKR portfolio companies across three areas: eco-efficiency, eco-innovation, and/or eco-solutions. The program applies KKR's approach of assessing, measuring, optimizing, and highlighting performance to support participating portfolio companies' efforts to manage their environmental impacts while also seeking to improve their businesses.

The second program results announcement comprised 28 portfolio companies – the largest number of reporting companies in the history of KKR’s environmental program - across four asset classes.
For additional information about the program and individual company results, please visit green.kkr.com.

Sustainable Innovation Platform

We are repositioning our proactive ESG programs as a sustainable innovation platform to continue to offer companies access to a range of best practices and resources.

Inaugural Eco-Innovation Award

In the spirit of innovation and value creation, in 2016, KKR launched an Eco-Innovation Award as a mechanism to encourage and reward innovative, environmentally beneficial projects that create business value at KKR portfolio companies.

The award recognizes the achievements of our portfolio companies and is intended to inspire them to identify new and enhanced ways of creating sustainable value. Specifically, the award program is intended to:

  • Help drive significant, measurable improvement in environmental impact (e.g., energy or water use).
  • Highlight measurable cost savings and/or added revenue that result from implementation of a project.
  • Encourage innovation, environmental awareness, and employee engagement at KKR portfolio companies.

The winner of the 2016 KKR Eco-Innovation Award was Qingdao Haier Co., Ltd. (“Qingdao Haier”), the white goods home appliance subsidiary of Haier Group. Qingdao Haier was selected for its development of energy-efficient air conditioners that reduce energy consumption using innovative technologies. Qingdao Haier’s winning Haier Intelligent Air Conditioning project includes a series of nearly 100 energy-efficient inverter room air conditioners. These innovative consumer appliances feature six industry-leading technologies that use smart technology sensors to detect body movement and temperature, and thereby adjust the air conditioner output capacity accordingly. Learn more about its project here.

As the winner, Qingdao Haier was awarded both a financial prize to enhance its broader environmental initiatives as well as customized project enhancement support from KKR and KKR Capstone.

Haier Award 2X

Resources to Drive Progress Across Our Portfolio Companies

We work to deliver practical and effective resources to help our portfolio companies achieve meaningful results and long-term benefits. In addition to the tactics below, we offer customized guidance and support to create sustainable value at our portfolio companies.

Global Network of Partners

Nongovernmental organizations, public interest groups, and industry associations can be powerful allies in helping us realize social and environmental benefits while achieving our business goals.

We have forged relationships with leading organizations that can bring expertise to our responsible investing efforts, including Business for Social Responsibility (BSR), Environmental Defense Fund, and Transparency International. Our global partners can be found here.

Conferences and Events

To help accelerate the adoption of a wide array of best practices at our portfolio companies, we connect nonprofit partners and other thought leaders with our portfolio companies to help them understand the value of these sustainability efforts, such as reducing waste and improving worker safety.

Since 2014, we have hosted two Sustainability Innovation Summits to facilitate understanding of best practices. We also convened portfolio company leaders for two Veterans Initiative Summits to expand their efforts. We incorporate relevant ESG-related content in a range of other conferences and events that we offer to our portfolio companies. These include KKR’s General Counsel Conference, Chief Investment Officer Conference, and Chief Procurement Officer Conference.

Guides and Webinars

We identify shared challenges and opportunities so that we can capitalize on these commonalities and offer a suite of resources, including guides and webinars on topics such as sustainability disclosure and crisis communications. In 2016, we hosted a six-part Sustainability Webinar Series featuring partner organizations to provide informed perspectives on, and solutions to, various ESG-related topics to our portfolio companies.