Our Proactive ESG Programs
Believing that we have a unique ability to provide objective and meaningful guidance to help our private equity portfolio companies to pursue ESG-related goals, we have created a number of proactive programs to share resources to address common challenges. Each program has internal and external partners who focus on producing results through financial, environmental, and social impact, or risk mitigation. We have five proactive ESG programs available for relevant private equity portfolio companies: Green Portfolio Program, Responsible Sourcing Initiative, KKR Wellness Works, Integrity and Engagement, and Vets @ Work.
In May 2008, KKR launched the Green Portfolio Program (GPP) in partnership with Environmental Defense Fund (EDF). The GPP is an operational improvement program that uses an “environmental lens” to assess critical business activities of KKR’s participating private equity portfolio companies.
At the end of 2013, 24 companies were publicly enrolled in the program, with 19 companies reporting results. To date, the program has achieved more than $917 million in cost savings and added revenue and avoided more than 1.8 million metric tons of GHG emissions, 4.7 million tons of waste, and 19.5 million cubic meters of water use.
The Responsible Sourcing Initiative (RSI) provides portfolio companies with guidance and resources focused on the continuous improvement of their management of human rights and environmental issues in global supply chains.
We have worked with 26 companies in our portfolio to review their procedures for sourcing practices and possible supply chain risks. Where there are areas for improvement we provide guidance and action plans. In 2013, we screened two additional portfolio companies on their sourcing practices, helped one company improve its supply chain policies, and identified two more for screening in 2014.
KKR Wellness Works was launched in 2011 and is built on the idea that employees who know their key health indicators are able to make better decisions for their health and ultimately improve their well-being. Companies enrolled in this program commit to offering an annual incentivized biometric screening to employees. They also provide resources for employees to better understand and respond to their results, while protecting individual privacy.
The program began at five of our U.S.-based portfolio companies. Currently, KKR Wellness Works is active at nine of our U.S.-based portfolio companies. Together, these companies provide health care coverage for approximately 190,000 employees. Based on 2012 employment data, our participating companies saw an aggregate biometric screening rate of 72 percent in 2012, compared to 46 percent prior to their engagement with KKR Wellness Works. A new analysis of the biometric screening rates at participating KKR Wellness Works companies is scheduled to be conducted in 2014.
In 2013, KKR, the University of Pennsylvania, and the American Heart Association (AHA) joined forces on a research collaboration to examine the effectiveness of workplace wellness initiatives. The joint study will be based on de-identified data gathered from KKR and four participating portfolio companies (HCA, Visant, Gardner Denver, and First Data). All KKR offices in the United States also participate in the Wellness Works program and have seen participation rates of approximately 98 percent in 2012 and 99 percent in 2013.
We encourage our portfolio companies to enhance engagement with their stakeholders by educating them about the voluntary codes and frameworks of transparency.
In 2011, we supported their efforts through a series of webinars that reached more than 22 portfolio companies around the world. In 2012, we launched a partnership with Transparency International (TI), a global anti-corruption NGO. Through this partnership we seek to enhance our investment and company management processes, specifically in business integrity.
In 2013, Transparency International participated in our annual General Counsel conference, presenting on best practices in anti-corruption and anti-bribery to 32 chief legal officers representing their respective companies. We also co-hosted a webinar for our global portfolio companies titled “Bribery in Business,” which provided an overview of TI’s International Business Integrity Toolkit.
Vets @ Work is an initiative aimed at recruiting and hiring veterans across our U.S.-based private equity portfolio companies.
The initiative grew by 100 percent since 2012 and includes eighteen of our private equity portfolio companies, which together hired more than 21,000 veterans since 2011.