The energy portfolios of 20 major private equity firms produce 1.5bn tons of greenhouse gases yearly, exceeding the annual emissions of all but China, the U.S., India, and Russia, according to a report by the Private Equity Stakeholder Project (PESP) and other organizations. These firms collectively manage $7.3tn in assets, with holdings including 15,000 miles of pipelines, 124GW of power generation capacity across 370 fossil fuel plants, and hundreds of oil and gas fields, the Guardian reported.
Private Equity’s Fossil Fuel Footprint: A Climate Concern
It’s a very opaque business model,
said Matt Parr of PESP, highlighting the difficulty in tracking private equity’s fossil fuel investments. While some firms like EQT position themselves as climate-conscious, their potential acquisitions—such as AES Corporation, which owns more than 20 power plants—raise alarms. If this deal goes through they will then be owners of a fleet of coal power and gas powered plants,
said Amanda Mendoza of PESP, warning that such moves could undermine climate transition efforts.
The analysis also revealed that private equity has funded over $1tn in fossil fuel assets since 2010. Despite public-sector retirement systems cutting fossil fuel exposure, firms like BlackRock, GIP, Energy Capital Partners, EQT and Kayne Anderson increased their fossil fuel portfolios compared to 2024, according to the report. Blackstone’s $2.16bn investment in NIPSCO for a 19.9% stake in a utility now planning a 2,300 MW natural gas plant underscores the sector’s growing ties to carbon-intensive infrastructure.
Data Centers and Climate Risks: A Growing Intersection
Private equity’s role in energy infrastructure increasingly overlaps with its bets on data centers, which require massive electricity. The electricity infrastructure required to power the AI revolution requires a tremendous amount of capital.
This overlap raises ethical questions. If a private equity firm owns both a utility and data center companies, it could create conflicts of interest. The report’s interactive map, detailing private equity’s global fossil fuel holdings, highlights the scale of these investments, including 35 LNG terminals, 13 coal terminals, and 250 oil and gas fields.
Rankings and Contradictions: Asia’s Private Equity Landscape
In Asia, Granite Asia was ranked the top private equity firm by Connected Communities, citing its mandate breadth and 20-year operating continuity. The firm has backed 48 portfolio companies valued above USD 1 billion since 2000, accounting for 18% of the region’s such firms, though this figure is unverified by the research. Granite Asia’s $10bn in assets under management, however, contrasts with third-party reports citing $8.5bn, underscoring data discrepancies.
The firm’s 2025 $350m Pan-Asia private credit strategy, anchored by state-linked institutions, and its $110m AI IPO Fund with DBS Bank, reflect its diverse approach. Yet, its ranking emphasizes mandate span over scale, placing it above rivals like RRJ Capital, which manages $25bn. Sovereign and institutional anchoring features prominently in the research, and is one reason Granite Asia registers among the leading financial firms in Singapore rather than as a venture specialist alone,
said the report, noting Granite Asia’s lineage through GGV Capital.
The Financial Implications: Returns and Risks
While private equity firms continue to profit, the financial risks of fossil fuel investments are becoming evident. A 2026 analysis found that oil and gas funds lost money after inflation, with many failing to generate strong returns for pensioners and investors. Communities and pension beneficiaries carry the costs, while private equity firms still get paid,
said Mendoza, criticizing the industry’s fee structure.
Meanwhile, KKR’s $126.5bn fundraising in 2026 outpaced Blackstone’s $82.46bn by 53%, marking a shift in the top-tier PE landscape. This surge highlights the sector’s resilience, even as climate scrutiny intensifies. For firms like Ampersand Capital Partners, recognition by GrowthCap for three consecutive years underscores the demand for sector-specific expertise, particularly in healthcare and life sciences.
As the debate over private equity’s climate impact intensifies, the sector’s dual role in funding both fossil fuel infrastructure and data centers—key drivers of the AI revolution—remains a focal point. With regulatory and public pressure mounting, the path forward for these firms will hinge on balancing profitability with environmental accountability.