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KKR enters ESG data scrum

Jun 24, 2022
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Illustration: Sarah Grillo/Axios

KKR is joining the stampede of financial and professional services firms into ESG data, revealing this week that it revamped its ESG data collection process after more than a decade.

Why it matters: Everyone wants to get ahead of pending SEC disclosure rules. Should they be approved as proposed, every company subject to SEC regulations will have to shell out for data reports regardless of market conditions.

State of play: The Big Four are best positioned to take over ESG data reporting once standards are set, Axios previously reported.

  • But it hasn't stopped private equity firms like KKR and other financial institutions like Moody's from taking their shots.

What they're saying: "In 2021, we started reengineering our annual ESG data collection process, which supplements the information gathered through our existing and ongoing engagements with portfolio companies, where relevant," KKR's annual sustainability report states.

  • "As an executive-level priority, we continue to invest considerable resources to this effort, including the recent hires of dedicated resources to manage data collection, analysis, and technology, and we are enhancing the technology platform that supports this process," it continues.

The intrigue: KKR is calling its credit portfolio analysis a scorecard, a deviation from other groups that have classified the same analyses as ratings.

  • Some groups have cautioned against the use of "ratings" given the wide variation between analyses and its association with determining a company's creditworthiness.
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