Frequently Asked Questions
KKR’s Green Portfolio Program (GPP), developed in partnership with Environmental Defense Fund, is an operational improvement program that uses an ‘environmental lens’ to assess critical business activities. Through the measurement and analysis of one or more Key Environmental Performance Areas (KEPAs), participating private equity portfolio companies identify policy and process changes resulting in cost reductions, operational improvements, and reduced environmental impacts. The objective of publishing the results of the GPP is to share best practices and demonstrate KKR’s approach to environmental, social and governance (ESG) management and transparency. For more information on KKR’s ESG efforts, please see our report, Creating Sustainable Value, available at: www.kkr2011esg.com
Frequently Asked Questions
1. Is the Green Portfolio Program (GPP) an environmental reporting program?
No, KKR’s Green Portfolio Program (GPP), developed in partnership with Environmental Defense Fund, is an operational improvement program that uses an “environmental lens” to assess critical business activities. The numbers shared publicly are not environmental “footprints.” Instead, through the measurement and analysis of one or more Key Environmental Performance Areas (KEPAs), private equity portfolio companies identify policy and process changes that result in cost reductions, operational improvements, and reduced environmental impacts. KKR communicates the results of these efforts publicly.
2. What are the selection criteria for joining the program?
The enrollment decision is based on two-way discussion between KKR and KKR private equity management teams and entails a consideration on whether the GPP addresses one or more of a particular company's key environmental issues.
The portfolio company’s maturity level in one or several KEPAs is not considered a criterion for joining the program. Non-participation in the program is not an indication that the portfolio company is not managing its material environmental impacts.
3. Why do some companies focus on a single KEPA while others may focus on all five?
The five KEPAs are greenhouse gas emissions, water, waste, priority chemicals, and forest resources. Participating portfolio companies work with KKR to assess which KEPAs are most relevant to their business by considering if the organization’s activities impact a KEPA and if the KEPA represents a significant cost or revenue to the organization. If these two criteria point to a high level of impact, then the organization will focus on the KEPA.
4. Is the GPP a green investment fund for KKR?
No, it is not. Investors cannot directly invest in the Green Portfolio Program.
5. Does the GPP use any accepted reporting protocol?
Since the GPP is not an environmental reporting program, it is not aligned with a specific protocol such as the Global Reporting Initiative, the Carbon Disclosure Project, the UN Global Compact, or the Greenhouse Gas Protocol. Greenhouse gas calculations are made using publicly available conversion factors for the relevant regional energy sources. We encourage our portfolio companies to follow recognized standards for reporting their environmental performance outside of the GPP results announcements.
6. How are the narratives of each GPP company written?
Each portfolio company tracks the metrics essential to the KEPAs that they are working to address through the Green Portfolio Program. In addition to the numerical data, they also provide to KKR information on the initiatives and future plans contributing to their results. KKR works directly with the companies to format the narratives for publication. The information shared is that of the portfolio companies, which are responsible for the content.
7. Are the financial results of the GPP reported by the portfolio companies?
In most cases, the financial results of the GPP are not reported externally by the portfolio companies outside of the Green Portfolio Program and cannot be cross referenced to other financial reports.
Updated December 2012
For more information on KKR’s responsible investment efforts, go to www.kkr2011esg.com.