Top Private Equity Firms' Energy Assets Emit 1.5 Billion Tonnes Of Greenhouse Gases

The world's top 20 private equity firms have energy portfolios that generate 1.5 billion tonnes of greenhouse gas emissions annually. This exceeds the yearly emissions of every country except China, the US, India, and Russia.

According to a new report, these firms manage $7.3 trillion in assets, giving them significant influence over the transition away from fossil fuels. However, their energy investments continue to include substantial fossil fuel assets, such as natural gas and coal-fired power plants.

The Private Equity Climate Risks Consortium analysed the top 20 private equity firms invested in global energy infrastructure. The firms own 15,000 miles of pipelines, 124 GW of power generation capacity across 370 fossil fuel-powered plants, and hundreds of oil and gas fields.

Private equity firms are increasingly involved in the energy sector, with half of the top 10 US data centre owners backed by private equity. The researchers examined energy holdings using private markets data provider PitchBook and drew on company websites, press releases, news reports, and regulatory filings.

Data gaps prevented the researchers from calculating the exact amount invested in fossil fuel assets. However, an earlier analysis showed that private equity had funded more than $1 trillion in fossil fuel assets since 2010.

Some public-sector retirement systems have sought to limit their exposure to fossil fuel projects. However, firms like BlackRock, GIP, Energy Capital Partners, EQT, and Kayne Anderson have increased the number of fossil fuel companies in their portfolios compared to 2024.

EQT has positioned itself as a climate-conscious investor supporting the energy transition. However, the firm, along with BlackRock's GIP and the California Public Employees' Retirement System, could soon acquire AES Corporation, which owns more than 20 power plants.

The report's findings are alarming, as they suggest that some private equity firms are transitioning towards fossil fuels instead of away from them. The growing involvement of private equity firms in energy infrastructure is increasingly intersecting with the expansion of data centres, which rely on fossil fuels for power.

The report highlights the need for greater scrutiny of private equity firms' role in the energy sector and their contribution to global emissions. As the world transitions towards a low-carbon economy, the actions of private equity firms will be crucial in determining the success of this transition.

The report's findings have significant implications for the environment and the global economy. As investors, private equity firms have a responsibility to consider the environmental impact of their investments. The report suggests that some firms are not taking this responsibility seriously enough, and that greater transparency and accountability are needed.

In conclusion, the report highlights the significant contribution of private equity firms to global greenhouse gas emissions. The firms' continued investment in fossil fuel assets is alarming, and greater scrutiny is needed to ensure that they are transitioning towards a low-carbon economy.

The private equity industry's role in the energy sector is complex and multifaceted. While some firms are taking steps to reduce their environmental impact, others are continuing to invest in fossil fuels. The report suggests that a more nuanced approach is needed, one that takes into account the complexities of the energy sector and the need for a rapid transition to a low-carbon economy.

Ultimately, the report's findings are a call to action for private equity firms, policymakers, and investors. The transition to a low-carbon economy will require significant investment and commitment from all stakeholders. The report highlights the need for greater transparency, accountability, and scrutiny of private equity firms' role in the energy sector.

The report's conclusions are clear: private equity firms must take their environmental responsibilities seriously and transition away from fossil fuels. The future of the planet depends on it.