Private equity firms continue to invest in some of the world's largest greenhouse gas producers, despite pressures from governments and consumers for a global energy transition. Following the COVID-19 pandemic, several companies, banks, and even energy firms began to introduce stronger environmental, social, and governance (ESG) standards, including measures to reduce carbon in their operations. However, just a few years later, many companies have reverted to their ESG goals, and private equity firms continue to finance some of the most polluting industries.
The role of private equity firms in greenhouse gas production
A recent report revealed that the portfolios of 20 private equity firms finance companies that produce 1.5 billion tons of greenhouse gases annually, a figure higher than the annual emissions of any country except China, the United States, India, and Russia. These firms collectively manage $7.3 trillion in assets, giving them the potential to shape major global financial decisions. However, their investments continue to support the development of fossil fuels, including oil, gas, and coal.
Investment in energy infrastructure and innovative technologies
The Climate Risk Consortium of private equity conducted a new analysis of 20 private equity firms that have invested in global energy infrastructure. This analysis showed that these firms own 15,000 miles of pipelines, 124 gigawatts of power generation capacity across 370 fossil fuel power plants, and hundreds of oil and gas fields. The researchers collected data from the private market data provider PitchBook and utilized information available on company websites, press releases, news articles, and regulatory filings. Due to a lack of data, they were unable to verify the total amount invested by the 20 private equity firms in fossil fuel assets. However, a previous PitchBook analysis indicated that private equity invested over $1.1 trillion in energy assets, most of which were fossil fuel assets, between 2010 and 2021.
The private equity firms examined in this analysis include BlackRock, GIP, Energy Capital Partners, EQT, and Kayne Anderson, all of which, according to the report, have increased the number of fossil fuel companies in their portfolios since 2024. In August 2025, S&P Global reported that global private equity and venture capital investments in oil and gas transportation are approaching last year's levels. This sector includes crude oil and natural gas pipelines, refined fuel distributors, and transportation companies. Investment in this sector totaled $4 billion across 13 deals between January and August last year, surpassing the $3.36 billion recorded in 12 deals during the same period the previous year.
Private equity investment in greenhouse gas-producing industries is expected to continue in line with the AI boom. Several technology companies worldwide are developing multiple large data centers, many of which operate on natural gas, used to power AI and other advanced computational operations. Therefore, investment in AI is expected to lead to increased carbon emissions. Nearly half of the top 10 data center owners in the United States have been backed by private equity.
Communications director for the Private Equity Stakeholder Project, Matt Parr, stated: "This industry is not adequately scrutinized and credited for its share in global emissions." He added: "Blackstone is acquiring some companies that are connected to public utilities. How can regulatory bodies manage and track all those various investments while trying to keep rates affordable for consumers?" He also said: "This indicates that private equity investments in data centers will continue to keep fossil fuel projects alive for longer."
Several private equity firms have previously announced goals to avoid investing in fossil fuels. Nevertheless, some appear to be shifting their stance. For example, the Swedish global investment organization EQT, which positions itself as a climate-conscious investor and supports the green transition, may soon acquire the energy company AES Corporation, even though natural gas still accounts for about 32% of AES's total generation capacity, with coal at 16% and oil at 2%.
Private equity firms have frequently argued that fossil fuel investments perform well, which is why they continue to invest in this sector. However, the Climate Risk Consortium's assessment of this claim suggests that this may not be the case. The consortium examined 145 private equity funds focused on oil and gas, whose performance data was available and which began investing from 2001 to 2016, and found that investors contributed a total of $190.4 billion to these funds and received $192.9 billion in returns, yielding only a 1% return. Further investigations indicate that private equity may play a significant role in supporting the ongoing expansion of the fossil fuel industry, as investment firms continue to finance oil, gas, and coal projects globally. This financing contributes to increased greenhouse gas emissions and contradicts the goals of several governments for an energy transition.
