private equity industry sees new green opportunities
DESCRIPTION
Historically, the private equity industry has excelled at improving the financial and operational performance of portfolio companies. Can they also become a leader in promoting sustainable "green" business practices? Here's slides prepared for a Dow Jones webinar discussing strategies that private equity firms are deploying to increase value and profit while also reducing energy and waste at portfolio companies. Learn more: http://blogs.edf.org/innovation/2009/02/26/private-equity-industry-sees-new-opportunities/TRANSCRIPT
Environmental Defense Fund• Environmental Defense Fund is a leading national nonprofit
organization representing more than 500,000 members.
• Since 1967, EDF has linked science, economics and law to create innovative, equitable and cost-effective solutions to society's most urgent environmental problems.
• EDF has a 20 year track record of success in partnering with business, including companies like McDonald’s, FedEx, UPS, DuPont and many others. EDF was named the #1 environmental group in a recent Financial Times global study of 850 business-nonprofit partnerships.
• To maintain its independence and credibility, EDF accepts no money from corporate partners; generous individuals and foundations fund its work.
www.edf.org
EDF/KKR Green Portfolio Project
ReportReportMeasureMeasure ManageManage SaveSave
Green Portfolio Framework
• Establish “Key Environmental Performance Areas” (KEPAs) and metrics
• Baseline current performance
• Develop goals and action plans
• Measure and report
Key Environmental Performance Areas (KEPAs)
Greenhouse Gases
WaterPriority Chemicals
Waste Forest Resources
Green Portfolio and PRIMEDIA
Forest resources [ops & facilities]
Waste [ops& facilities]
GHGs [distribution & fleet]
Waste [end of life]
L M H
H
M
L
Environmental Impact
Bu
sin
ess
Imp
act
Modified from “The Metrics Navigator,” GEMI.
Water [ops & facilities]
Priority chemicals [ops& facilities]
Illustrative
Green Portfolio Pilot ResultsDescription
•Improved fleet efficiency 4% (gallons/ton of product moved)Improved fleet efficiency 4% (gallons/ton of product moved)•Saved $8.2 million in fuel costsSaved $8.2 million in fuel costs•Avoided 22,000 metric tons/yr of CO2 emissions (4,400 cars)Avoided 22,000 metric tons/yr of CO2 emissions (4,400 cars)
•Improved efficiency by 22% (paper use/$revenue) Improved efficiency by 22% (paper use/$revenue) •Saved $2.9 million in material costs Saved $2.9 million in material costs •Reduced 3,000 tons of paper use (40,000 trees)Reduced 3,000 tons of paper use (40,000 trees)
20082008
•Improved fleet efficiency by 9% (gallons/stop) Improved fleet efficiency by 9% (gallons/stop) •Saved $1.2 million in fuel costsSaved $1.2 million in fuel costs•Avoided over 3,000 metric tons/yr of CO2 emissions (600 cars)Avoided over 3,000 metric tons/yr of CO2 emissions (600 cars)
• Improved production efficiency by 16% (lbs waste/unit)Improved production efficiency by 16% (lbs waste/unit)• Saved $4 million in material costs Saved $4 million in material costs • Avoided 650 tons of solid waste (46 garbage trucks)Avoided 650 tons of solid waste (46 garbage trucks)
20082008
20082008
Company Year
Timeline
• Establish KEPAs and metrics• Launch pilot projects
Q3 2008Q3 2008
Q2 2009Q2 2009
Q1 2009Q1 2009
Q4 2009Q4 2009
• Complete pilot projects• Begin roll-out to portfolio companies
• One-year progress update
• Complete roll-out• Publish environmental progress report and post tools