KKR Rewards Qingdao Haier With $25,000 for Sustainability Effort

(Bloomberg) -- KKR & Co., one of the oldest private equity firms, awarded portfolio company Qingdao Haier Co. with $25,000 as it tries to inspire its businesses to be more environmentally friendly.

The Chinese home-appliance maker is the first recipient of KKR's eco-innovation award, which the New York-based firm started this year to promote environmentally beneficial projects that also have business value, such as cost savings, according to a statement Wednesday. KKR agreed to buy a 10 percent stake in Qingdao Haier in 2013 for 3.38 billion yuan ($500 million).

Some of the largest private equity firms are expanding environmental, social and governance programs for their portfolios of companies, which employ hundreds of thousands of people. Blackstone Group LP, Carlyle Group LP and Oaktree Capital Group LLC are among asset managers that have outlined ESG policies for their holdings. Washington-based Carlyle produces an annual corporate citizenship report outlining sustainability initiatives among its companies.

While ESG considerations can factor into KKR's investment process, the firm rarely makes an investment decision on those criteria alone, according to Elizabeth Seeger, who helps lead KKR's green solutions program.

“ESG-related concerns are often intertwined with other business issues that make the business more, or less, attractive for investment,” Seeger said in an e-mail.

Qingdao Haier's energy-efficient air conditioners, which use temperature and movement sensors to optimize output, beat projects submitted by more than 10 other KKR portfolio companies. Judges from KKR and organizations including the Environmental Defense Fund and Walgreens Boots Alliance Inc. evaluated submissions.

To contact the reporter on this story: Melissa Mittelman in New York at mmittelman@bloomberg.net. To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Devin Banerjee, Timothy Sifert