Carbon emissions from private equity surpass those of the global aviation sector

In a shocking revelation, a new report has uncovered that the emissions produced by the 21 largest private equity firms collectively exceed the energy used to power all the homes in America. The report, produced by Americans for Financial Reform, Global Energy Monitor, and the Private Equity Stakeholder project, assessed three key criteria: alignment with decarbonisation targets, percentage of fossil fuel companies in portfolios, and overall carbon dioxide equivalent (TCO2E) emissions.

The findings indicate that these firms are responsible for 1.17 billion metric tons CO2 equivalent of emissions annually, with the emissions primarily coming from upstream oil and gas, LNG terminals, and coal-fired power plants. This total surpasses the carbon footprint of the global aviation industry as of 2019.

However, the report does not specify whether these emissions are increasing, decreasing, or staying the same over time. Moreover, it does not mention any specific actions being taken to reduce these emissions or any penalties or consequences for firms with high carbon emissions.

Amanda Mendoza, senior climate research and campaign coordinator of the Private Equity Stakeholder Project, expressed her concerns about the impact of private equity firms on our health and livelihoods. She stated that these firms make billions by investing public employees' retirement money into fossil fuel assets. Mendoza further added that private equity firms make their profits while largely avoiding liability for the damages their fossil fuel investing causes frontline communities.

The report does not provide information on the carbon footprint of investments outside of upstream oil and gas, LNG terminals, and coal-fired power plants. However, many private market managers limit disclosures of their carbon footprint, which can be significant.

Despite these concerns, pension funds and institutional investors are increasingly investing in private markets to boost returns and aid energy transition. The at least 21 private equity firms identified by the report include Apollo Global Management, Blackstone, Carlyle Group, KKR, Bain Capital, TPG Capital, Warburg Pincus, CVC Capital Partners, Cerberus Capital Management, and Hellman & Friedman, among others.

As the world grapples with the climate crisis, the report underscores the urgent need for transparency and accountability in the private equity sector. The findings serve as a wake-up call for private equity firms to take meaningful action to reduce their carbon emissions and contribute to a sustainable future.

Carbon emissions from private equity surpass those of the global aviation sector