Key facts
- Twenty private equity firms fund companies that produce 1.5 billion tonnes of greenhouse gases annually.
- These firms manage $7.3 trillion in assets and continue to fund fossil fuel development.
- The firms collectively own 15,000 miles of pipelines and 124 GW of fossil fuel power generation capacity.
- Private equity funded over $1.1 trillion in energy assets between 2010 and 2021, mostly fossil fuels.
- Investment in oil and gas transportation by private equity was on track to surpass 2024 levels by August 2025.
- Oil- and gas-focused private equity funds from 2001-2016 yielded investors a return of just 1%.
Despite growing pressure for an energy transition and the introduction of environmental, social, and governance (ESG) standards, private equity firms are continuing to invest significantly in fossil fuel industries. A recent analysis by the Private Equity Climate Risks Consortium found that the portfolios of 20 major private equity firms fund companies responsible for 1.5 billion tonnes of annual greenhouse gas emissions, a figure higher than the yearly emissions of any country except China, the United States, India, and Russia.
These firms, which collectively manage $7.3 trillion in assets, are channeling funds into oil, gas, and coal development. The consortium's assessment revealed that these firms own approximately 15,000 miles of pipelines and 124 gigawatts (GW) of power generation capacity across 370 fossil fuel-powered plants. Data from PitchBook, company websites, press releases, and regulatory filings were used for the analysis. While exact investment figures in fossil fuel assets remain unverified due to data gaps, a prior PitchBook analysis indicated that private equity funded over $1.1 trillion in energy assets between 2010 and 2021, with the vast majority being fossil-fuel related.
Firms including BlackRock, GIP, Energy Capital Partners, EQT, and Kayne Anderson are reported to have increased their fossil fuel company holdings since 2024. Investment in the oil and gas transportation sector, encompassing pipelines, distributors, and shipping companies, was on track to surpass previous year's levels by August 2025, with $4 billion invested across 13 deals between January and August 2025. The ongoing AI boom is also expected to drive further investment in natural gas-powered data centers, potentially increasing carbon emissions. Roughly half of the top 10 U.S. data center owners have benefited from private equity backing.
While some firms have previously stated aims to avoid fossil fuel investments, their actions suggest a shift. EQT, for instance, a Swedish investment organization that promotes itself as climate-conscious, is considering acquiring AES Corporation, a company where natural gas, coal, and oil constitute a significant portion of its generation capacity. Private equity firms often justify continued fossil fuel investments by citing reliable performance. However, the Private Equity Climate Risks Consortium's review of 145 oil- and gas-focused funds found that investors contributed $190.4 billion and received only $192.9 billion back, a return of just 1%.