{"id":543760,"date":"2010-04-26T13:01:06","date_gmt":"2010-04-26T17:01:06","guid":{"rendered":"http:\/\/blogs.edf.org\/innovation\/?p=1750"},"modified":"2010-04-26T13:01:06","modified_gmt":"2010-04-26T17:01:06","slug":"private-equity-as-%e2%80%98environmental-crusaders%e2%80%99-the-times-they-are-a-changin","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/543760","title":{"rendered":"Private Equity as \u2018Environmental Crusaders\u2019? The Times They Are a-Changin’"},"content":{"rendered":"

This is a guest post by Ian Bailey, Managing Partner of <\/em>Capital C Partners<\/a>, a strategic communications firm.\"\"<\/a><\/em><\/p>\n

What do mattress maker Sealy Corp., discount retailer Dollar General and consumer guides publisher PRIMEDIA all have in common? They\u2019re all private equity-owned and have adopted new, environmentally sound business practices delivering millions of dollars in annual savings.<\/p>\n

Given the turbulent ride the financial services sector has endured over the past few years it seems counter-intuitive that anyone in the sector would be devoting special attention to environmental matters. The private equity industry has been beset with multiple issues, including constrained access to capital, overleveraged portfolio companies, a paucity of public market exits, the tax treatment of carried interest under scrutiny and growing calls by LPs for greater transparency. So it would seem the industry is a particularly unlikely candidate for embracing new thinking on environmental matters. However, that\u2019s precisely what has happened.<\/em><\/p>\n

When we here at Capital C Partners first started working with Environmental Defense Fund<\/a> (EDF) on its Green Returns<\/a> program over six months ago, we reached out to a cross section of our contacts in the PE world to get a sanity check on just how receptive investment professionals might be to the concept that environmental measurement and management practices could deliver tangible bottom line value. The feedback was consistently equal parts of interest, skepticism, a need to see supporting data and \u2018this just isn\u2019t a priority when I\u2019m worrying about potential covenant breaches…\u2019 The final kicker from several of our PE friends was \u2018my institutional investors really don\u2019t care about this stuff, whatever they publicly say – it\u2019s all about the returns.\u2019<\/p>\n

Fast forward to today: Kohlberg Kravis Roberts & Co.<\/a> (KKR) and The Carlyle Group <\/a>(Carlyle), the world\u2019s two largest private equity firms by assets under management, now both have dedicated programs specifically designed to ensure that environmental best practices are hard-wired into their processes. KKR\u2019s Green Portfolio<\/a> investment management program now extends across 20 percent of its global portfolio and Carlyle\u2019s EcoValuScreen<\/a> due diligence tool will be applied to all new investments in its U.S. and European buyout funds.<\/p>\n

EDF is now in conversation with many of the world\u2019s leading PE firms about Green Returns and the conversations have moved from \u201cwhy should I do this<\/em>\u201d to \u201chow do I do this<\/em>?\u201d<\/strong><\/p>\n

This change has not happened overnight, and there\u2019s undoubtedly still much to be done. But private equity leaders such as KKR and Carlyle, through their collaborations with EDF, are providing the pathway and proof that many in the industry needed to see in order to take that first important step towards incorporating environmental management practices into their business processes and those of their portfolio companies.<\/p>\n

This video from The Deal.com<\/a> \u2013 featuring conversations with EDF, Carlyle, KKR and Sealy \u2013 makes it clear that Green Returns now has all the hallmarks of an emerging industry trend \u2013 one with the potential to live up to EDF\u2019s ambition that it become a new best practice for the entire private equity industry.<\/p>\n

For more information about EDF\u2019s Green Returns initiatives, look for them at the Private Equity Insight Forum 2010<\/a> in London in May and SuperReturn US<\/a> in Boston in June, or contact Tom Murray<\/a>, managing director of corporate partnerships at EDF.<\/p>\n

This content is cross-posted on Greenbiz.com<\/a><\/em><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

This is a guest post by Ian Bailey, Managing Partner of Capital C Partners, a strategic communications firm. What do mattress maker Sealy Corp., discount retailer Dollar General and consumer guides publisher PRIMEDIA all have in common? They\u2019re all private equity-owned and have adopted new, environmentally sound business practices delivering millions of dollars in annual […]<\/p>\n","protected":false},"author":4273,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-543760","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/543760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4273"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=543760"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/543760\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=543760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=543760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=543760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}