You don't normally associate tree huggers and green activism with pinstripe suits and private equity financing, but Kohlberg Kravis and Roberts (KKR) is breaking stereotypes with its innovative Green Portfolio Project. KKR, led by the legendary financial wizard Henry Kravis, understands the Environmental Movement is not some momentary fad; recycling, renewable energy, energy efficiency, air pollution and waste reduction are fast becoming the normal way of life rather than an "alternative" way of doing things. Think of it this way...we don't think twice about women having the right to vote, or that the FDA ensures food and drugs are safe. But in their time of their implementation, these normal standards were considered radical and revolutionary. So it will be with Environmentalism. And KKR recognizes this<.a>.
KKR's Green Portfolio Project is a joint effort between KKR, the Environmental Defense Fund, and the companies in KKR's portfolio to adopt environmental best practices. Ken Mehlman, the Head of Global Affairs for KKR, recently announced how KKR is working towards a greener planet. KKR and the EDF have set up a series of environmental measuring tools to The first phase of the Green Portfolio project involved three companies: US Foodservice, Primedia, and Sealy Mattresses. US Foodservice saved $8.2 million in fuel costs and cut 22,000 metric tons of carbon dioxide emissions in 2008 by simply improving the efficiency of their truck fleet. Primedia, a publishing company, saved $2.9 million by reducing its paper use by 3,000 tons.
Ken Mehlman said these Green Portfolio initiatives were "good examples of how smart companies can cut costs and support the environment."
The Green Portfolio Project is still rolling along. Five more companies have joined the Green Portfolio: Accellent, Biomet, Dollar General, Hospital Corporation of America (HCA), and SunGard. (You can click on each company logo to get the details of their environmental initiates).
KKR's push for Green Investment was inaugurated in its surprising takeover of TXU, the Texas Utilities company. Cooperating with the EDF, Henry Kravis made sure TXU adopted several environmental principles, including reducing the number of coal-fired plants that company wanted to build. From that PR success, KKR saw the long-term wisdom of adopting green best practices. That's possibly why they hired on Ken Mehlman, former Republican Party Committee Chairman and an experienced environmental lawyer. You may or may not agree with Ken Mehlman's politics, but his organizational skills and environmental credentials can't be denied. Whether you're a Republican, Democrat, or independent, the future definitely hold stricter environmental standards, and Ken Mehlman will be the voice promoting this new movement in environmentally responsible investment.
So you want to make a surefire investment? I'd bullish on KKR and its Green Portfolio companies...and I bet Mother Nature is, too!
Recommended Reading: Private equity – Easing the barbarians through the gate: An excellent overview of KKR's ethical practices and new attitude towards responsible investing.
Ken Mehlman will be speaking at the Fortune Brainstorm Green 2010 conference.
Check out this video about the Green Portfolio Project entitled "Ken Mehlman of KKR and EDF Members Discuss Partnership"
