Private equity giant Kohlberg Kravis Roberts & Co. (KKR)has made its pact with environmental management official! Stemming from a one-time deal where the firm partnered with the Environmental Defense Fund (EDF) (Read: Internship opportunities for MBAs with the EDF in consulting and sustainability)to steer the deal involving the purchase of TXU--a utility that has a long history of inviting ire from environmentalists--by Texas Pacific Group in 2007 to include lower greenhouse gas emissions and other environmental initiatives.
Now the firm has announced that it will expand its Green Portfolio Program to 20% of its companies. So how did this odd partnership come to fruition? From a simple and early realization that private equity in the environmental space remained unexplored and meant a plethora of opportunities as knowledge and pressure of sustainability and the carbon accounting game gains leverage across industries.
While for the fund, it is about spreading the "doing good" message, for KKR, it presents more money in the bank. And with $54.8 billion in assets, they are well aware of it. And the agency is all for it. Quoted in the San Francisco Chronicle last week, Tom Murray, the fund's managing director of corporate partnerships put it succinctly as "a growing realization that environmental management can play a much greater role in value creation for private equity firms when leveraged across a portfolio." He further added, "What's exciting for us is that we can both share best practices and capture the business and environmental savings at scale."
If you want to check out KKR's nifty new website on their green work, visit green.kkr.com. Also, while we are on the topic of discussing "good," why not check out what employees have to say about the firm's business outlook, work/life culture and diversity initiatives!
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