NEW YORK – The partnership between Kohlberg Kravis Roberts & Co. L.P. (KKR) and Environmental Defense Fund (EDF) has helped three KKR companies — U.S. Foodservice Inc., PRIMEDIA Inc., and Sealy Corporation — save $16.4 million and prevent more than 25,000 metric tons of greenhouse gas emissions in 2008. KKR and EDF will soon implement the initiative at four additional KKR portfolio companies: Accellent, Biomet, Dollar General, and HCA.
KKR and EDF began working together in May 2008 to develop and test a set of analytic tools and metrics to help companies improve in several key environmental performance areas, including greenhouse gas emissions, waste, water, forest resources, and priority chemicals.
U.S. Foodservice, PRIMEDIA, and Sealy participated in the project's pilot phase, using these tools to evaluate environmental impacts, identify areas for environmental and business improvement, establish baselines and metrics, and develop goals and action plans for future improvement. The process helped managers cost-effectively improve efficiency and reduce waste, while addressing the environmental impacts of their businesses.
Specific results to date include:
U.S. Foodservice, a national foodservice distributor, implemented new driver policies, business processes and truck technologies to improve operational efficiency and reduce delivery fleet emissions. By improving efficiency of its fleet (gallons/ton of product moved) by more than 4 percent during 2008, U.S. Foodservice:
- Saved $8.2 million in fuel costs.
- Avoided 22,000 metric tons of CO2 emissions (equivalent to more than 4,400 cars).
This year, U.S. Foodservice plans to further improve fleet productivity by scaling up successful initiatives, such as driver awareness programs, automatic idle shutoff, maximum speed controls, and assessing and implementing new initiatives, including improved trailer cooling practices and other technology solutions.
PRIMEDIA, a print, Internet, and mobile consumer residence guide provider, increased online efforts and resized its publications to reduce use of forest resources. Improving efficiency (paper use/revenue) by 22 percent during 2008, PRIMEDIA:
- Saved $2.9 million in material costs.
- Reduced more than 3,000 tons of paper use (equivalent to over 40,000 trees).
This year, PRIMEDIA plans to reduce paper consumption an additional 20 percent by redesigning publications and pursuing additional online strategies, and is exploring opportunities to expand publication recycling programs currently encouraged at all locations. Also in 2009, PRIMEDIA will focus on measuring and reducing its greenhouse gas emissions 10 percent by improving sales and delivery routing and continuing efforts to consolidate office and warehouse space.
Sealy Corporation, one of the largest bedding manufacturers in North America, recycled raw materials used for producing bedding and improved delivery fleet efficiency through improved driver policies and truck technologies to reduce waste and decrease greenhouse gas emissions. Improving the efficiency of its fleet (gallons/stop) by almost 9 percent and reducing scrap per bed by 16 percent during 2008, Sealy:
- Saved $1.2 million in fuel costs.
- Avoided more than 3,000 metric tons of CO2 emissions (equivalent to more than 600 cars).
- Saved more than $4 million in material costs and avoided 650 tons of solid waste (equivalent to the capacity of more than 46 garbage trucks).
This year, Sealy plans to roll out improved fleet routing software, install speed governors on its trucks, reduce idling time, and incentivize drivers to improve fuel economy. The company will continue reducing solid waste by improving manufacturing processes and reducing packaging. In addition, Sealy will focus on improving the energy efficiency of its facilities.
In 2009, KKR and EDF will continue to work together to extend the program across KKR's U.S. portfolio. Already, KKR has launched a Web site that provides sample tools, best practices, and case studies for cost-effectively improving environmental performance to promote action among its portfolio companies.
To drive broader change across the private equity and other industries, the tools and best practices developed through the partnership will be available through the EDF Innovation Exchange in the fall of 2009 and KKR and EDF will continue to publicly share results.