A new analysis finds that private equity firms managing $7.3 trillion in assets back fossil fuel portfolios that emit about 1.5 billion tonnes of greenhouse gases a year. Deals keep closing despite ESG pledges, and the AI boom is adding fresh demand for natural gas.
Fossil fuel portfolios behind outsized emissions
The energy portfolios of 20 major private equity firms generate about 1.5 billion tonnes of greenhouse gases a year, more than the annual emissions of every country except China, the United States, India, and Russia. The Private Equity Climate Risks Consortium reached that figure after studying firms that together manage $7.3 trillion in assets. Those firms hold stakes in 15,000 miles of pipelines, 124 GW of power generation capacity across 370 fossil fuel-powered plants, and hundreds of oil and gas fields.
Researchers built the analysis from PitchBook data, company websites, press releases, news articles, and regulatory filings, but data gaps kept them from verifying the firms' total fossil fuel investment. A separate PitchBook analysis had previously found that private equity funded more than $1.1 trillion in energy assets between 2010 and 2021, most of it in fossil-fuel assets.
Deals keep closing despite ESG pledges
Investment hasn't slowed. S&P Global reported $14.7 billion of oil, gas, and coal deals in the first seven months of 2026 alone. The firms named in the report — BlackRock, GIP, Energy Capital Partners, EQT, and Kayne Anderson — have each increased the number of fossil fuel companies in their portfolios since 2024. In a separate August 2025 report, S&P Global said oil and gas transportation deals were on track to surpass the prior year's pace: investment in the sector totalled $4 billion across 13 deals between January and August, up from $3.36 billion across 12 deals in the same period the year before.
AI's power demand adds to the mix
Private equity's exposure to greenhouse gas-heavy industries should continue alongside the AI boom, as new data centres run on natural gas alongside renewables, nuclear, and other sources. Roughly half of the top 10 US data centre owners have been supported by private equity. According to Matt Parr, communications director for Private Equity Stakeholder: "This industry doesn't get enough scrutiny and credit for its contribution to global emissions".
Some firms that built climate-conscious reputations appear to be shifting course too. EQT, which has positioned itself as a supporter of the green transition, could soon acquire AES Corporation even though natural gas accounts for roughly 32% of AES's total generation capacity, while coal contributes 16% and oil 2%.
Fossil fuel bets haven't even paid off well
Private equity firms have often defended fossil fuel investments by arguing they reliably perform well. The Private Equity Climate Risks Consortium tested that claim by reviewing 145 oil- and gas-focused funds that began investing between 2001 and 2016: investors contributed $190.4 billion to the funds and received $192.9 billion back, a return of just 1%.
Source: Oilprice.com
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