Tag Archives: private equity

Elizabeth Seeger: Private Equity and Sustainability

Meg Schneider is a junior at Penn majoring in Environmental Studies, with a concentration in Sustainability and Environmental Management. She is currently researching behavioral solutions to environmental problems with Professor Dana of Penn Psychology for her thesis.

Elizabeth Seeger, formerly of Environmental Defense Fund and now a Principal at KKR, gave a lecture to a packed room March 21, 2012 as she discussed the intersection of Private Equity and Sustainability. Ms. Seeger began her presentation with the much-lauded Green Portfolio Program, the first sustainability initiative of any private equity firm. She explained that KKR was uniquely able to invest in sustainability as it employs a long-term perspective, active ownership, and shared practices. The Environmental Defense Fund, along with Seeger, was brought for its environmental expertise and credentials to create a full operational approach for KKR’s portfolio of corporations.

Part of Seeger’s job involves convincing corporations how sustainability is valuable. For example, unsustainable practices can disrupt supply chains, resource availability, and overall product quality. In addition, sustainability can create a “win, win, win” scenario for society, shareholders, and stakeholders as new opportunities are taken. Ms. Seeger works to create “shortcuts” for companies to start tracking and improving company performance on eco-efficient and other metrics with its portfolio and other tools. With KKR’s unique positioning, companies can also benefit from “shared knowledge” on proven practices such as cleaner fleets, efficient routing, and green packaging as well as preferred partnerships for vendors. As a result, the Green Portfolio program has currently saved over $365,00,000 for its 16 corporations in what Seeger described as “not only low-hanging fruit, but fruit just being left on the ground”.

Another large aspect of the speech involved responsible sourcing tactics, and the two sourcing attacks faced by KKR companies in 2010. As small NGOs gain greater power to influence consumers, companies face larger risks when employing unethical sourcing for their materials and labor. Instead of ignoring the unfavorable aspects of NGOs, Seeger’s team focused on partnering with the NGO Business for Social Responsibility. She also discussed stakeholder engagement in how companies talk to their employees, consumers, and community. After a student wondered how she dealt with companies that initially resist compliance with sustainability; Seeger explained that the fine line between pushing and encouraging can be very challenging and is part of the learning process for any sustainability consultant.

Elizabeth Seeger of KKR presenting on sustainability and private equity

On the question of how companies should pursue sustainable and non-sustainable projects, Seeger stressed the importance of cost-neutrality and return on investment. In her words, “all things should be linked to business value”. She further differentiated by using the example of a carbon footprint. While a carbon footprint costs money and involves much bureaucracy, it’s unclear how it can create value for many businesses. Seeger’s presentation showed another view into how businesses can employ sustainability to create value.