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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

Private Equity Industry Sees New Green Opportunities

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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/

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Page 1: Private Equity Industry Sees New Green Opportunities

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

Page 2: Private Equity Industry Sees New Green Opportunities

EDF/KKR Green Portfolio Project

ReportReportMeasureMeasure ManageManage SaveSave

Page 3: Private Equity Industry Sees New Green Opportunities

Green Portfolio Framework

• Establish “Key Environmental Performance Areas” (KEPAs) and metrics

• Baseline current performance

• Develop goals and action plans

• Measure and report

Page 4: Private Equity Industry Sees New Green Opportunities

Key Environmental Performance Areas (KEPAs)

Greenhouse Gases

WaterPriority Chemicals

Waste Forest Resources

Page 5: Private Equity Industry Sees New Green Opportunities

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

Page 6: Private Equity Industry Sees New Green Opportunities

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

Page 7: Private Equity Industry Sees New Green Opportunities

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