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KKR ESG & Citizenship Report

Eco-Efficiency: Toys“R”Us

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Enhancing Lighting Efficiency, Lowering Operating Costs

Key Environmental Performance Area:

  • Greenhouse Gas Emissions (Facilities)

Avoided approximately 5,300 metric tons of greenhouse gas emissions during 2015.

Implemented a lighting upgrade program.

Conducted a night audit to identify energy reduction opportunities.

All data and information in this case study are as of December 31, 2015, unless otherwise noted.

Challenge

Retail buildings in the United States have the highest energy costs of all commercial buildings, approximately $20 billion annually, and account for the second largest percentage of greenhouse gas (GHG) emissions.i Retail building managers can decrease their energy costs and associated greenhouse gas emissions through energy efficiency initiatives.

Toys"R"Us is one of the world’s leading specialty toy and baby products retailers, selling merchandise globally through more than 1,600 stores in more than 35 countries as well as through the company’s website.

Response

Toys"R"Us began partnering with KKR’s Green Solutions Platform (GSP) team in 2015, focusing on energy use reduction in its facilities to reduce associated costs and GHG emissions. In 2015, the company undertook a number of projects to improve operations and impact, some of which are highlighted below:

  • At the Babies"R"Us stores, replaced 75-watt halogen bulbs with 18-watt LED bulbs in approximately 8,000 lamps.
  • At the headquarters in New Jersey, identified unnecessary off-hour energy use through a night audit, which resulted in operational changes for lighting scheduling, kitchen usage, and other miscellaneous power use. Significant savings were achieved by reducing lighting use by two hours per day.
  • Reviewed the store chain lighting schedule, which resulted in beneficial adjustments that yielded lower energy usage and associated costs.
  • Replaced high wattage high-bay lighting fixtures with an LED lighting solution.
  • Replaced fluorescent plug-n-play strip fixtures with an LED lighting solution.

Resultsii

In 2016 and beyond, Toys"R"Us is continuing to focus on the energy efficiency of its facilities and is considering or actively implementing the following activities:

  • Continuing the lighting upgrade program.
  • Rolling out a retro-commissioning program in its facilities.
  • Improving energy performance through benchmarking and in depth analysis on lowest performing stores.

Toys“R”Us began participating KKR’s green program in 2015 and is communicating results for the second time.

i Energy Star. "Retail: An Overview of Energy Use and Energy Efficiency Opportunities." n.d. Web. 21 April 2016. https://www.energystar.gov/ia/business/challenge/learn_more/Retail.pdf

ii Self-reported portfolio company data is not calculated, reviewed or independently verified by KKR or KKR Capstone. For more information regarding the results methodology for companies evaluating their own data, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

Unless otherwise noted, portfolio company data represents 2015 results, published in August 2016. These case studies may contain forward looking statements including descriptions of planned projects and projected results and savings. These statements are subject to the risk that the projects will not develop as planned or at all or that projected results and savings are not realized.