EDF and KKR: The not so odd couple
July 8, 2009 | Posted by Tom Murray in Partnerships, Private Equity
Partnering with leading corporations to demonstrate that good environmental strategy is good business strategy is not a new concept at EDF. In fact, we’ve been doing it for 20 years. What has evolved are the partners we select, the goals we set and the scale of the impacts that we try to achieve.
We’re still learning every day about how to create even better partnerships with truly transformational impacts. Our search to find the highest leverage opportunities to create environmental and business results has recently led us to a place that may look unusual from the outside. In fact, a recent CNNMoney.com story called our partnership with private equity giant Kohlberg Kravis Roberts (KKR) “An environmental odd couple.”
We see things a little differently. According to the Private Equity Council there are 1,040 private equity (PE) firms in the U.S. (2,150 worldwide). These PE firms invest hundreds of billions annually and have ownership positions in thousands of companies around the globe.
Among other things, the PE industry is known for transforming companies through strong management and rigorous tracking of operational and financial performance. Our work with leading companies has proven that measurement and management of environmental performance creates significant business value. In addition to measurement and management, leverage and scalability across multiple portfolio companies, a longer term investment view (typically 5 to 7 years) and a growing focus on operations make PE firms uniquely positioned to build value through environmental performance and innovation.
From our perspective, KKR and the PE sector are not “odd” partners for EDF, rather really “strategic” partners for creating business value through environmental innovation and then taking that concept to scale across hundreds of portfolio companies. I’m actually surprised that someone didn’t beat us to it.
In future posts we’ll be sharing more about our thoughts on why PE is uniquely positioned to be a leader in this space, as well as the framework and metrics that we’ve developed to help make environmental management business as across the PE industry.
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