The energy holdings of 21 private equity firms are responsible for 1.2 gigatons of fossil fuel emissions every year, according to the latest Private Equity Climate Risks Scorecard.
The report was researched and written by advocacy group Private Equity Stakeholder Project, the nonprofit Americans for Financial Reform Education Fund and research group Global Energy Monitor.
The scorecard "documents how private equity firms and their executives are making billions by investing public employees’ retirement money into planet destroying fossil fuel assets,” said Amanda Mendoza, senior research & campaign coordinator, climate for the Private Equity Stakeholders Project and one of the climate risk report’s authors.
The report gave the firms letter grades based on their portfolio company emissions of key fossil fuel assets including upstream fossil fuel extraction, liquified natural gas and coal plans as well as the firms’ progress toward an energy transition.
“We found a sharp contrast between what private equity firms are saying and their actions, and it paints a picture of an industry that is really engaging in greenwashing its massive role in causing the climate crisis,” said Oscar Valdes Viera, research manager for Americans for Financial Reform Education Fund and report co-author during a news conference.
Firms get 'F' and 'D' grades
EIG Global Energy Partners ranked last, receiving an "F" grade, with 23 fossil fuel companies in its portfolio that had mostly upstream refining and production operations, resulting more than 255 million metric tons of carbon dioxide emissions annually, the report said.
EIG did not immediately respond to requests for comment.
Among those earning "D" grades: Quantum Capital Group with 93% of its energy portfolio in fossil fuel companies, Kayne Anderson Capital Advisors with 88% in fossil fuel companies, Encap Investments with 87% of its energy portfolio invested in fossil fuel companies, ArcLight Capital Partners with 81% of its energy portfolio in fossil fuel companies, Carlyle Group with 77% of its energy portfolio and Brookfield Asset Management with 50% of its energy portfolio in fossil fuel companies.
“Carlyle remains focused on investing in the energy transition, not divesting from it,” a Carlyle spokesperson said. “As one of the first global alternative asset managers to set a net zero target in 2022, we are committed to achieving real emissions reductions across our portfolio, rather than shifting high-carbon assets to others.”
The report estimates that Carlyle’s fossil fuel companies emit a combined 214 million in carbon dioxide equivalent each year.
A Brookfield spokesperson said that the report "contains significant factual inaccuracies, incomplete information and a flawed methodology.”
A joint venture of ArcLight and Blackstone Capital Partners VII since 2017 have owned the General James M. Gavin Coal Plant, a 2,600-megawatt, coal-fired plant, located in Cheshire, Ohio, which was ranked as the nation’s ninth top emitting power plant in 2022 , the report said.
ArcLight, whose fossil fuel companies emit 55 million in carbon dioxide equivalent’s annually, and Kayne Anderson declined comment.
A Blackstone spokesperson said that the firm has signed an agreement to sell its stake in the business.
Gavin is a legacy investment from 2017, Blackstone said in a written statement.
The plant has made over $1 billion in investments in the latest air quality control technology,” Blackstone said.
“Under our investment, emission control has improved to be best-in-class – Gavin is in the lowest decile in the United States on a CO2 tons per MWh basis for large plants of its kind,” Blackstone said. The firm didn't provide a source for that data.
The Blackstone spokesperson said while firm executives are still reviewing the report, it includes “a considerable number of ‘fossil fuel assets’ where we do not have an investment – creating significant errors in their figures.”
The report also excludes “a number of our energy transition and renewable investments,” the spokesperson said.
Quantum could not be immediately reached for comment.
