KKR Expands Sustainability Across US Property Portfolio with BREEAM

The certification of KKR’s portfolio under the BREEAM In-Use scheme demonstrates the firm’s commitment to modern, efficient, and resilient real estate. These properties, primarily constructed within the last decade, are a testament to KKR's broader strategy to align with globally recognised sustainability standards and enhance the overall performance of their assets.

The primary challenges faced during this initiative included dealing with a wide range of geographies, asset uses, and building systems, which made uniform assessment and action planning complex. Each asset had its unique characteristics, including different climate conditions, local regulations, and building technologies. These differences required tailored approaches to ensure that each asset met the BREEAM standards effectively.

The certification process also had to be completed within a tight timeline to align with KKR's year-end planning. This urgency was driven by the need to integrate the action plans and resulting improvements into the 2024 strategy. Coordination between multiple stakeholders, including on-site property teams and GreenGen assessors, was critical to meet these deadlines without compromising the quality of the assessments and the subsequent action plans.

GreenGen chose the BREEAM framework to provide a consistent assessment method, aligning with KKR's sustainability-focused investment strategy. Detailed action plans were developed for each asset, prioritising improvements based on cost-effectiveness and potential return on investment. Key recommendations included energy performance assessments, water efficiency measures, and health and wellness enhancements.

To overcome the geographic and regulatory challenges, GreenGen tailored their assessments to each location’s specific building systems, regulations, and climates. This customised approach ensured that the recommendations were practical and effective for each unique asset.

Innovative technologies and processes were adopted to enhance sustainability. For example, local energy performance assessments and advanced metering systems were implemented to optimise energy usage. Water-saving technologies such as leak detection systems and low-flow fixtures were installed to reduce water consumption. Additionally, health and wellness initiatives included the installation of CO2 sensors and improved lighting systems to enhance indoor air quality and occupant comfort.

GreenGen also provided comprehensive action plans that included no-cost measures as well as projects requiring investment. These plans prioritised actions based on the average cost per weighted credit, ensuring cost-effective improvements were implemented first. This strategic approach maximised the return on investment for KKR while ensuring meaningful improvements in sustainability performance.

The BREEAM certification provided multiple benefits, clearly demonstrating the value of sustainable practices:

• Risk mitigation: Identification and mitigation of potential risks, enhancing asset resilience.
• Efficiency improvements: Enhanced asset management efficiency, leading to cost reductions and operational savings.
• Market position: Improved market position by aligning with recognised global sustainability standards.
• Tenant satisfaction: Healthier and more productive working environments for tenants, supporting their CSR goals.
• Environmental impact: Significant reductions in energy and water usage through targeted upgrades.
• Financial incentives: Easier access to green financing and incentives due to improved sustainability credentials.
• Future planning: Establishment of a baseline performance to inform ongoing improvements and maintenance strategies.
• Portfolio performance: Overall increase in average asset score by approximately 13%, with portfolio ratings breaking down as follows:
  • Pass: 8%
  • Good: 76%
  • Very Good: 16%