Private equity fossil fuel investment impact

Reports from the Private Equity Climate Risks Consortium indicate that the energy portfolios of the world’s 20 largest private equity firms produce approximately 1.5 billion tons of greenhouse gases annually. This level of emissions surpasses that of almost every nation, with the exception of China, the United States, India, and Russia.

These firms manage roughly $7.3 trillion in assets and support hundreds of energy companies, including significant holdings in oil and gas fields, pipelines, and fossil fuel-powered power plants. The data suggests that private equity is increasingly utilizing fossil fuel assets to provide electricity to data centers.

While many institutions implemented stricter environmental, social, and governance (ESG) criteria following the Covid-19 pandemic, there has been a noted retreat from these targets. Despite the perception of high profitability, research by the Private Equity Stakeholder Project, Americans for Financial Reform Education Fund, and Global Energy Monitor found that 145 analyzed oil and gas funds yielded a profit of only about 1% between 2001 and 2016.