Elizabeth Seeger’s initial passion for the environment was ignited during a visit to central Brazil as a teenager, when she witnessed first-hand the impact made on local communities by the activities of multinational corporates. With this lasting impression from her travels instilling a resolute belief that both the biggest environmental challenges and the most impactful solutions can come from the corporate sector, Seeger directed her academic focus to the sustainability space.
Following graduation with an Environmental Studies degree from the University of Chicago and achieving a MBA from the Wharton School in Pennsylvania, Seeger embarked on a career as a change-maker. Joining the financial sector in 2009, she started her first role at KKR, overseeing the consideration and implementation of environmental, social and governance (ESG) issues across the firm’s investment process.
In the same year, KKR became a signatory to the UN Principles for Responsible Investment (PRI), and just two years after Seeger’s onboarding, the company published its first ESG Report.
Fast-forward over a decade and today, Seeger leads the company’s global sustainability initiatives as managing director of KKR’s Sustainable Investing team, from her Washington D.C. base.
In this exclusive interview, Seeger shares with FinanceAsia her thoughts on the direction of KKR’s sustainability initiatives, the firm’s progress in Asia, and her personal accomplishments.
Join FA as we celebrate her position as a female leader in finance driving change, this International Women’s Day (IWD).
FA: Elizabeth, can you offer your perspective on KKR’s responsible investment drive and how it has evolved since the firm’s early involvement in the space?
ES: Our starting point has always been that thoughtfully managing ESG topics helps protect and drive value.
Twelve years ago, we recognised the opportunity and need to proactively consider broader stakeholder issues as part of our investment process, so we started to build an internal team with ESG, as well as regulatory, reputational, and geopolitical expertise and began to incorporate ESG considerations in our investment process.
We manage ESG issues like any other business issue, and the consideration of ESG risks and value creation opportunities has become part of our investment processes globally. For example, our investment committees consider material ESG factors in the pre-investment phase, and we engage with companies on ESG topics post-investment to apply best practices and leverage our network of partners where possible, to improve performance.
It’s been quite the journey. Our approach is constantly evolving, and while I’m proud of the progress we have made over the past 13 years – the entirety of my KKR career – we recognise that there is more work to be done. We will need to keep refining our toolkit as practices evolve and the bar gets higher.
FA: How do you approach ESG engagement across global markets, given regional differences in regulation and best practices, as well as differing investment strategies?
ES: Our approach to ESG integration and management is grounded in authenticity and intentionality, is materiality-driven, and is integrated into our investment decision-making. Our Responsible Investment Policy articulates how we integrate ESG risks and value creation opportunities into investment processes across our asset classes globally.
However, there may be regional differences and nuances, so it is also about understanding modern day challenges and the local contexts they are set in. We take a local approach to identifying areas for operational improvement and creating sustainable value for our portfolio and investors.
While our Responsible Investment Policy is our “North Star”, we have also developed business-specific ESG strategies and tools to help address asset- or investment strategy-specific nuances that influence our engagement approach.
Our investment teams also have access to our Sustainable Investing team – a team of more than 10 dedicated ESG experts with asset-specific expertise that support the different business strategies.
FA: How can the industry use technology – data and analytics – to drive change and push for ESG disclosure? Which tools does KKR draw upon to measure progress and execute business transparently?
ES: Thoughtful collection, measurement and analysis of ESG data is a key focus for us and an area where we think technology can play an especially meaningful role.
We want to be able to measure ESG performance in the same way we would measure financial performance, by determining the right set of meaningful indicators, asking portfolio companies to collect data around them, and to measure and monitor their performance over time.
Technology can help streamline data collection. It enables us to identify patterns and trends that can inform our efforts to proactively manage ESG-related opportunities across our portfolio. The number of ESG-focussed consultancies and data solutions providers has increased and many are evolving to cover a broader range of ESG data needs. For example, one of our portfolio companies, ERM, recently launched an AI-enabled ESG rating platform designed as an early-stage diligence tool for private and public markets investors.
We believe that the demand and need for ESG reporting will only continue to grow as disclosure requirements evolve and investors push for even more transparency around ESG risks and opportunities. Technology will play a critical role in data collection and analysis, and we expect to see an increased uptake of new tools in coming years.
FA: How do you work with the KKR Capstone team to shape the strategies of portfolio companies and to drive change?
ES: A benefit of working at a place like KKR is the wealth of experience and network of internal and external ESG expertise available to help drive this work.
Besides our investment teams, who are primarily responsible for integrating ESG considerations into the investment process, our Sustainable Investing team works closely with colleagues across KKR Capstone, Global Public Affairs, and Global Impact, among others, to support our portfolio companies.
Over the past year, we have also grown our team to add new capabilities. For example, we have sustainability and climate experts within KKR Capstone to help implement decarbonisation strategies in partnership with our companies. Over the past decade, we have collaborated with KKR Capstone to support companies on ESG topics ranging from worker safety to responsible sourcing, to inclusion and diversity.
One example in Asia is our work with the iconic Australian brand, The Arnott’s Group, to enhance its ESG practices, including their efforts to implement less resource-intensive processes to achieve net-zero operational emissions by 2040, and across the value chain by 2050.
On the social front, the company is building its diversity and inclusion practices, and providing more diverse food options and improved nutrition guidance for its products. These are all steps that will position The Arnott’s Group well for the long term.
FA: What opportunities and challenges does the Asian landscape present in terms of Sustainability developments and investment?
ES: While we engage our portfolio companies on a broad range of ESG issues and focus on business-relevant issues, there are three cross-portfolio topics – climate, human capital, and data responsibility – that we find generate significant opportunities and risks for companies globally, including in Asia.
Specifically on climate, we see the energy transition as presenting unique opportunities in Asia, given the significant amount of global capital needed to facilitate the net zero transition in emerging and developing economies.
One example of how we are supporting the transition is our investment in First Gen, one of the largest independent power producers in the Philippines. While the firm is relatively emissions-efficient with its use of natural gas, the company recognises the need for a complete shift towards renewable energy, and so is exploring technologies and alternative fuels, such as hydrogen. In 2016, First Gen committed to refraining from building, developing, or investing in coal-fired generation plants.
In India, our renewable energy platform, Virescent Infrastructure, also established the country’s first renewable energy infrastructure trust (REIT), to boost India’s effort to achieve its clean energy targets.
FA: And what developments are you working on in Asia, across the social side?
ES: The social space is constantly evolving, and so we believe that partnership is core to progress as it allows us to tap into the knowledge of experts who are focussed on addressing these issues. We do this by working with our companies, investors, governments, and NGOs to develop a deep understanding of issues and remain on the leading edge of emerging issues and expectations.
One of our external partners in this space is Business for Social Responsibility (BSR), a global non-profit that works with its network of more than 250 member companies and partners working to build a just and sustainable world. We have also partnered with investors – those often very focussed on best practices related to ESG issues.
The topic of social and social-sustainability initiatives has become increasingly critical considering the impact of Covid-19 on communities, enterprises and individuals. In response, in April 2020, we launched a $50 million KKR Relief Effort which comprised of commitments from KKR, our leadership and employees. It is a true first for KKR as an organisation, and was designed to support those most impacted by the crisis and the resulting economic dislocation.
These efforts have very much extended to Asia Pacific. There are several pillars of our efforts, including providing partnership and funds to leading non-profits, assisting small businesses with grants and resources, supporting portfolio company employees, and engaging our employees as leaders and changemakers in their communities. We are proud to be part of the solution to the challenges facing our shared communities.
FA: What KKR initiatives are you most excited about over the course of the next 12 months?
ES: Frankly, a lot! There has been a lot of real momentum behind KKR’s ESG efforts, and in the past year alone, our Sustainable Investing team has nearly tripled in size, adding new capabilities. For example, we hired our first ESG Compliance Officer, who’s responsible for enhancing ESG compliance, and a senior technology developer to drive ESG integration across our data and technology systems.
Ahead, we look forward to building on the momentum generated in 2021. For example, we formalised our firm-wide commitment by creating an ESG Committee consisting of members of senior management to share emerging sustainability issues and best practices to ensure our ESG-related priorities are being managed across all of our strategies.
We also launched our Sustainability Expert Advisory Council (SEAC), which brings together leading voices across key ESG issues to ensure we stay at the forefront of sustainable investing by bringing external insights and perspectives to bolster our capabilities, challenge our thinking, and ultimately advance our strategy and practices. At our recent inaugural meeting with SEAC members, they shared their ambitions for their partnership with KKR in the year ahead. I am incredibly excited about the opportunity to learn from them and partner each other on ESG initiatives.
FA: What have been the highlights of your career to date at KKR? What achievements are you most proud of in the sustainability space?
ES: Every year at KKR has been full of surprises, and also, progress. We’ve accomplished a lot! But, my most exciting year was probably 2021, when our team expanded significantly and we started building the roadmap for the coming years. We truly have a wonderful team.
More broadly, I see many reasons for optimism when it comes to sustainability outcomes that I haven’t seen before in my career. I am excited about the commitments that people are making today to drive progress. Outside of my work with KKR, I’m really proud to participate with the Sustainability Account Standards Board (SASB), which helped drive the understanding that ESG issues are business issues and should be treated and disclosed as such.
FA: What are the skills needed, especially as a woman, to step up into a leadership position today?
ES: I think there are a few characteristics that have served me well in my role. One is to be able to understand what motivates different people and leverage that understanding. In the area of sustainability, people are inspired to action for different reasons. Some, because they think it’s important for the planet, others, because of the impact on business value. Understanding and speaking to different motivations can help drive understanding and buy in.
Another is to be tenacious. While I am really proud of the successes of my years at KKR, I have not always been successful. I spend a lot of time working to understand why things haven’t worked and what I can do better next time, but I don’t give up! Sustainability topics are complex and fostering an understanding of them is, too.
As I reflect on the attributes of my team, they are all proactive, critical thinkers, who are excited by the opportunity to have a positive impact. Everyone on the team needs to be able to influence people across and outside of KKR, so having strong subject matter expertise, but also excellent communications skills are key.
FA: How can financial participants in Asia empower their female team members to push boundaries?
ES: While at my many years at KKR, I have a lot to be proud of, sometimes I have failed. To take risks and push boundaries, we need to create a culture where innovation is encouraged, but failure is seen as a learning experience. That needs to be built into the culture.
FA: It has been a turbulent couple of years, with uncertainty continuing into 2022. How have kept yourself motivated in difficult times? Have you developed any new skills, or a focus on personal well-being?
ES: Indeed, very turbulent! My team at KKR kept me motivated at work. We are truly a family that cares about one another. In the early days of the pandemic, we spent a lot of time together (virtually), just talking about our days and making sure we were all okay.
Personally, I focussed on my physical health and making sure I was getting enough fresh air and sleep. I admit, however, that the sewing machine I bought in 2020 to learn how to become a master seamstress never made its way out of my closet! Maybe I will get to that in the coming year instead!