The combined energy portfolios of the world’s 20 largest private equity firms generate approximately 1.5 billion tons of greenhouse gases annually, surpassing the emissions of all countries except China, the United States, India, and Russia, according to a new analysis. These firms collectively oversee $7.3 trillion in assets across various sectors, granting them significant influence over the global transition from fossil fuels.

The report, prepared by the Private Equity Climate Risks Consortium, examined investments held by these private equity firms in global energy infrastructure. It found ownership of extensive fossil fuel assets, including 15,000 miles of pipelines, 124 gigawatts of power generation capacity distributed among 370 fossil fuel power plants, and numerous oil and gas fields. Many of these assets continue to depend heavily on coal and natural gas, including those that supply electricity to expanding datacenter facilities.

Half of the top ten U.S. datacenter owners are supported by private equity firms, highlighting the sector’s considerable role in private ownership of energy-intensive infrastructure. Matt Parr, communications director for the Private Equity Stakeholder Project (PESP), one of the consortium’s member organizations, criticized the industry’s limited transparency and its substantial contribution to global emissions.

The report incorporated data from PitchBook, a private markets information provider, alongside company disclosures and regulatory filings. However, incomplete data prevented researchers from quantifying the exact value of fossil fuel assets held by these firms. Earlier estimates suggest that private equity investors have backed more than $1 trillion in fossil fuel projects since 2010.

Although some public-sector pension funds have sought to reduce fossil fuel exposure, several major private equity firms, including BlackRock, GIP, Energy Capital Partners, EQT, and Kayne Anderson, increased their holdings in fossil fuel companies compared with 2024. The report pointed to a planned acquisition involving EQT, BlackRock’s GIP, and the California Public Employees’ Retirement System of AES Corporation, which owns more than 20 power plants predominantly powered by coal and natural gas. Critics warn this transaction could hinder rather than advance these firms’ stated energy transition goals.

EQT and ArcLight declined to comment on the report’s findings, while Blackstone responded to queries regarding its investments. Blackstone holds a 19.9% stake in Northern Indiana Public Service Company (NIPSCO), acquired in June 2024 for $2.16 billion. NIPSCO, which serves 1.3 million customers in Indiana, recently announced plans to construct a 2,300-megawatt natural gas power plant aimed at powering datacenters, a project expected to generate millions of tons of carbon dioxide annually. Blackstone characterized itself as a minority investor without control over NIPSCO’s daily operations or management decisions.

Blackstone has also committed over $25 billion toward datacenter and energy infrastructure development in Pennsylvania, underscoring private equity’s growing role in meeting rising electricity demand driven by artificial intelligence applications. The firm’s managing directors noted the substantial capital requirements for expanding energy systems to support AI technologies.

The intersection of private equity ownership in both utilities and datacenter companies raises concerns about potential conflicts of interest. Nichole Heil, senior research and campaign coordinator at PESP, questioned how regulatory bodies can effectively oversee investments when firms own both energy suppliers and their customers. Parr added that such ownership structures could prolong reliance on fossil fuel infrastructure.

Private equity’s involvement in energy infrastructure also exposes investors, including public pension funds, to risks beyond environmental impact. For instance, Stonepeak Infrastructure Partners owns liquefied natural gas (LNG) tankers currently immobilized by geopolitical tensions in the Strait of Hormuz. Several state pension systems hold investments in Stonepeak. Although Stonepeak did not provide specific responses, it affirmed its commitment to investments that support cleaner fuels and mass electrification.

On financial returns, the consortium analyzed 145 private equity funds focused on oil and gas initiated between 2001 and 2016, involving $190.4 billion in contributions. These funds returned $192.9 billion to investors, yielding approximately a 1% net gain. Amanda Mendoza of PESP noted these modest returns challenge the perception that fossil fuel investments in private equity are highly profitable, emphasizing that the funds have barely broken even overall.