Private equity firms are maintaining significant investments in fossil fuel infrastructure despite mounting pressure for global energy transition. A recent analysis by the Private Equity Climate Risks Consortium examined the portfolios of 20 major private equity firms, revealing substantial holdings in greenhouse gas-emitting assets. These firms collectively manage $7.3 trillion in assets and their portfolios are responsible for annual emissions of 1.5 billion tonnes—a volume exceeding that of any country except China, the United States, India, and Russia.
The consortium’s investigation documented extensive fossil fuel infrastructure holdings among these firms, including 15,000 miles of pipelines, 124 gigawatts of power generation capacity distributed across 370 fossil fuel plants, and hundreds of oil and gas fields. Data sources for the analysis included PitchBook, company websites, press releases, news articles, and regulatory filings. Earlier analysis suggested private equity funded more than $1.1 trillion in energy assets between 2010 and 2021, predominantly in fossil fuel sectors. Notable firms identified in the assessment included BlackRock, GIP, Energy Capital Partners, EQT, and Kayne Anderson, with these firms expanding their fossil fuel holdings since 2024.
Private equity investment in oil and gas transportation experienced continued growth, with S&P Global reporting earlier this year that funding levels were tracking ahead of previous years. The expanding artificial intelligence sector is expected to further drive private equity investment in fossil fuels, as data centres powering advanced computing often rely on natural gas. Approximately half of the top 10 data centre operators in the United States have received private equity backing.
Several private equity firms have previously stated commitments to avoiding fossil fuel investment, yet some appear to be reversing course. EQT, a Swedish investment organization that has marketed itself as climate-conscious, is reportedly considering acquisition of AES Corporation despite the company deriving a substantial portion of its generation capacity from natural gas and coal.
When assessed on financial grounds, private equity fossil fuel investments demonstrate modest returns. An analysis of 145 oil and gas-focused private equity funds established between 2001 and 2016 showed investors received $192.9 billion on a $190.4 billion contribution, representing only a 1 percent return. Proponents have traditionally justified continued fossil fuel investment on the basis of reliable financial performance, though recent findings challenge this rationale.
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