Leadership Through Policy – KKR Case Study

Ken Mehlman has shown leadership through example recently, with his announcement to extend their green program to a fifth of their global portfolio. In doing so, these companies will reduce their environmental impacts in the areas of waste, paper, chemical use, and energy and water consumption in am measurable way. Ken Mehlman is a member of Kohlberg, Kravis, Roberts & Co. LLP, a private equity firm which recently sold shares to the public and became a listed company on NYSE.

Ken Mehlman is the man responsible for the global external affairs activities of the firm, and by extension, carries the responsibility in ensuring that their owned subsidiaries comply to a decent standard of ethics and social responsibility. After a brief pilot programme at 3 of its investments yielded successful results, KKR has announced that they will now engage one fifth of their portfolio in using the same green strategies. This is a significant move that is relatively unmatched across the breadth of the private equity industry, and therefore Ken Mehlman is a fine example of a leader who doesn’t wait for others to make a decision before acting.

Says the KRR founder in a recent discussion: “The business case for environmental management has never been stronger,”. “The Green Portfolio Program highlights that environmental performance and business performance can go hand-in-hand. We are very excited about the momentum to date and the fact that we have taken this effort global in such a short period of time.”

Cynics may argue that this fund is only engaging in ethical activities in order to attract capital from the ever-growing band of ethical-investors who limit their savings for only the most reputable and up-standing companies to invest in. I would disagree, firmly on the basis that such investors prefer to invest in shares on a one-on-one basis, and would not risk pooling funds into a Private Equity firm that could still spend its money wherever it liked.

So I give a hats off to Ken for setting a good standard that I hope will continue to extend across the KKR group and across the Private Equity industry as a whole!