The energy portfolios of 20 private equity firms produce 1.5bn tons of greenhouse gases a year, more than the annual emissions of any country except China, the US, India and Russia, according to a new report. Together, these firms manage $7.3tn in assets of all kinds, affording them the ability to shape the pace of the transition away from fossil fuels. However their energy investments include significant fossil fuel assets including natural gas and coal-fired power plants to provide electricity to datacenters.
The analysis of the top 20 private equity firms invested in global energy infrastructure was conducted by the Private Equity Climate Risks Consortium. It found that the firms owned 15,000 miles of pipelines, 124GW of power generation capacity across 370 fossil fuel-powered plants and hundreds of oil and gas fields. Half of the top 10 US datacenter owners are backed by private equity, said Matt Parr, the communications director for Private Equity Stakeholder Project (PESP), one of the organizations in the Private Equity Climate Risks Consortium.
Because of gaps in the data, the researchers were unable to calculate how much the 20 private equity firms invested in fossil fuel assets. But an earlier analysis of data compiled on PitchBook shows that private equity has funded more than $1tn in fossil fuel assets since 2010, said Amanda Mendoza, senior research and campaign coordinator on the climate team at the Private Equity Stakeholder Project. While some public-sector retirement systems have been trying to limit their exposure to fossil fuel projects, the private equity firms BlackRock, GIP, Energy Capital Partners, EQT and Kayne Anderson increased the amount of fossil fuel companies in their portfolio compared with 2024, according to the report.
The private equity firm EQT has positioned itself as a climate conscious investor, supporting the energy transition. But EQT, along with Blackrock’s GIP and the California Public Employees’ Retirement system could soon acquire AES Corporation, which owns more than 20 power plants. It seems like they’re transitioning to fossil fuels instead of away.” EQT did not respond to questions from the Guardian about the private equity firm’s fossil fuel investments.
ArcLight also declined to comment on the report’s findings. Private equity firms’ growing role in energy infrastructure is increasingly intersecting with another major private equity bet: the buildout of datacenters to support artificial intelligence. Private equity firms have emerged as the largest datacenter owners outside of big tech.
In June 2024, Blackstone invested $2.16bn in the Northern Indiana Public Service Company (NIPSCO) for a 19.9% stake in the utility, including a seat on the board. NIPSCO, which serves 1.3 million customers across Indiana, has since announced plans to build a 2,300 MW natural gas power plant to serve datacenters, with the potential to emit millions of tons of carbon dioxide a year. Asked to comment, Blackstone told the Guardian it is a minority investor in NIPSCO, does not manage the company’s day-to-day operations, and has no control over management decisions.
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