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In an interview with Ainslie Chandler for Bloomberg Brief, Ken Mehlman explains KKR’s commitment to ESG and how it builds these considerations into its investment process by identifying new opportunities to invest, achieving double bottom-line benefits and de-risking companies. Mehlman discusses the process KKR uses to evaluate investments from an ESG perspective and the impact some of those investments have made in the lives of many people. Mehlman also shares insights about what the future holds for KKR and what could be their next big ESG investment.

Mehlman describes the process of KKR’s engagement on ESG issues as “very rigorous.” He explains that the potential company’s “protocol, their processes, their culture, their commitment—[are] examined both in terms of ‘where is the problem?’ but also ‘what can we do to make it better during the course of our ownership?’” The purpose of KKR’s ESG investment is not only to make a smart deal that will yield profit, but also to identify investments with an opportunity to improve the world.

KKR has already invested $5 billion globally for companies committed to ESG missions, Mehlman said. Those investments all have different faces: “We have done a fair bit of investing in food safety in China—starting in dairy and now in chicken and pork,” he said. “We have also invested a lot in water and renewable energy…We’ve done an investment in China in water cleanliness.”

“We expect to invest more in challenges or solutions related to water scarcity,” he added.

When asked about what issues today affect global companies, Mehlman answered that the firm is interested in how companies handle the privacy and protection of their customers. This issue has been highlighted by recent data breaches, he said.

In his opinion, Ken Mehlman does not feel that companies should ever have to choose between ESG best practices and profit. Mehlman explains that “returns are in ESG.” Speaking of an investment by KKR that allowed millions of people to receive adequate retirement pensions, Mehlman said, “The world will only be saved at a profit and the only way you are going to make a profit today is to understand the world. ESG can help you do both.”

At SuperReturns International 2016 in Berlin, Ken Mehlman spoke with “Bloomberg Markets.” He discussed the 2016 outlook for private equity and KKR’s global vision. He acknowledged that, “there’s a lot of volatility across lots of economies across the world, a lot of industries,” but said that people at KKR look at things optimistically because they see situations like this as being full of opportunity.

In this video, Ken Mehlman attributes KKR’s positive outlook to their patient capital; belief that success is measured over the long-term, not just in quarterly returns; proven ability to add growth and value to the companies they invest in beyond just capital; and ability to invest flexibly. For firms with those qualities, according to this video, now is a good time to invest.

When asked about any surprises or points of focus at the conference, Ken Mehlman responded, “A lot of focus…on the energy space, broadly, and what’s happening there.” In fact, the conference dedicated a full day to Environmental Social Governance (ESG), including a keynote by Al Gore and David Blood. To Mehlman, this is a reflection of where the world is going. Investing successfully today, he says, requires the ability to understand, “where you’re operating, the geopolitical questions, to understand public policy and regulatory issues, and to understand the value that can be created if you can engage effectively with stakeholders.”

Kenneth Mehlman also explains that private equity has the ability to be a solution provider, not a savior, to help build infrastructure, finance retirement, and build better companies. Doing so can generate the returns investors expect, while also helping to solve important societal problems.

For example, according to Mehlman, KKR has invested in three different municipal water systems, modernizing them in a way that is environmentally positive and beneficial to the community. To take advantage of such opportunities, it is necessary to understand the people in those communities.

Finally, Mehlman was asked about regulation. In his opinion, investment should be regulated, so when he meets with government officials or policy makers, it’s less about asking for reduced regulation and more about asking what private equity can do to help and where investment is needed.