Greener Business Practices Save KKR Companies $160M

Greener Business Practices Save KKR Companies $160M

Recycling bins -- CC licensed by Flickr user skuds

Improving fleet efficiency, reducing energy use, promoting recycling and other green business practices have eliminated $160 million in operating costs for eight companies participating in the Green Portfolio Program.

The program, the product of a partnership between Environmental Defense Fund and private equity firm Kohlberg Kravis Roberts & Co. L.P. (KKR), is only two years old but the results speak for themselves. Eight companies within KKR's portfolio also avoided 345,000 metric tons of carbon dioxide emissions, 8,500 tons of paper, and 1.2 million tons of waste, in addition to the $160 million in reduced operating costs.

"Just for context, this is 10 times what we reported in 2009 from three participating companies," Elizabeth Seeger, KKR Capstone associate and former EDF project manager and Geballe Fellow, said today during a conference call with reporters.

EDF and KKR rolled out the Green Portfolio pilot program in 2008 with Primedia, Sealy and U.S. Foodservice, all of which saved $16.4 million in six months from reduced waste, fuel, energy and paper use. Last year, KKR added Accelent, Biomet, Dollar General, HCA and SunGard Data Systems; Lehigh Phoenix, Oriental Brewery, First Data and Tarkett enrolled earlier this year. Roughly 20 percent of its portfolio is now participating in the program.

Of the 10 companies reporting results today, Dollar General netted the greatest amount of avoided operational costs: $106 million. The discount retailer focused on making its facilities and fleet more efficient through lighting retrofits, energy management systems, improved routing and increasing the number of cartons shipped per load. Reducing and recycling cardboard allowed the company improve its waste efficiency by a whopping 75 percent.

U.S. Foodservice achieved $22.3 million in fuel and energy savings by improving its fleet performance, adding alternative fuels, lighting retrofits, high-efficiency HVAC systems, and more efficient equipment. Sealy saved $12.1 million optimizing equipment, cutting mattress waste, and using software to make delivery routes more efficient.

The Green Portfolio Program approach has been dubbed Green Returns. Over the past two months, KKR has worked on a data collection tool to help member companies submit their data, but nonmembers can access the resources online to help companies assess performance and identify opportunities to reduce environmental imapcts.

CC licensed by Flickr user skuds.