Investors in private equity want to commit capital to general partners who adopt responsible environmental, social and governance (ESG) practices, according to KKR co-founder and co-chief executive officer George Roberts.
Roberts was delivering a keynote address at Private Equity International’s Responsible Investment Forum in New York Thursday, in which he described ESG as “more important than it ever has been” for the private equity industry. The event was co-hosted by the UN Principles for Responsible Investment.
Roberts stressed that ESG practices would continue to get more important for the industry as a whole.
KKR is implementing responsible investment practices in at least 16 of its portfolio companies – approximately 25 percent of its entire portfolio – an initiative that has saved the firm at least $160 million over two years. Some $20 million was saved at just one portfolio company, Dollar General, simply by recycling cardboard the company previously would throw away.
“What we’ve done is the equivalent of taking 20,000 cars off the road, 37,000 homes off the grid and 330,000 trucks that would go to landfills that don’t have to do that anymore,” Roberts said.
The firm focuses on key ESG issues such as reducing greenhouse gas emissions and reducing waste.
“If you take all 16 companies combined over a two-year period, we reduced greenhouse gas emissions by 450,000 metric tons, we reduced waste by 1.2 million metric tons and we created savings for those 16 companies of $160 million,” Roberts said.
“Our investors want us to do this, it’s the right thing to do, it’s good for business, it’s profitable and your investors should like this.”
KKR currently has investments in 62 companies in 9 countries, with combined revenues of $200 billion.