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global energy monitor
21 Private Equity Firms Fund Over a Gigaton of Annual Climate Pollution
"Private equity firms and their executives are making billions by investing public employees' retirement money into planet-destroying fossil fuel assets," said one researcher.
Oct 01, 2024
The energy portfolios of over 20 top U.S. private equity firms are responsible for an estimated combined 1.17 gigatons of annual greenhouse gas emissions—more than three times as much as from the energy used to power every home in the United States, according to a report published Tuesday.
The report, titled Private Equity Risks Scorecard 2024, was published by Researchers for the Americans for Financial Reform Education Fund, Global Energy Monitor, and the Private Equity Stakeholder Project. The scorecard examines the energy portfolios of 21 leading U.S. private equity firms, which manage a combined total of over $6 trillion worth of companies.
"At the end of the day, the price we pay for private equity's greed is our health and livelihoods, for ourselves and generations to come."
"Private equity firms and their executives are making billions by investing public employees' retirement money into planet-destroying fossil fuel assets," Amanda Mendoza, senior climate research and campaign coordinator of the Private Equity Stakeholder Project, said in a statement.
"These billion-dollar companies make their profits while largely avoiding liability for the damages their fossil fuel investing causes frontline communities," Mendoza added. "At the end of the day, the price we pay for private equity's greed is our health and livelihoods, for ourselves and generations to come."
According to the report, the five biggest investors in annual climate polluters are EIG Global Energy Partners, the Carlyle Group/NGP Energy Capital, Brookfield/Oakfield Capital Management, Quantum Capital Group, and BlackRock Private Equity Partners. These five firms each funded at least 100 million metric tons of CO2 equivalent (CO2e) annually.
Some of these companies, most notably BlackRock, rank among the
world's biggest investors in fossil fuels.
"Private equity continues to transform the financial markets and the daily lives of communities around the globe," the report states. "With over a trillion dollars in energy investments generating high greenhouse gas emissions and minimal public visibility, private equity firms play an outsized role in accelerating the climate crisis."
"The private equity energy portfolios covered in this report are responsible for an estimated combined total of 1.17 gigatons of annual emissions," the publication continues. "This figure equals 1.17 billion metric tons CO2 equivalent (CO2e) and is limited to the three categories covered in the scope of this research: upstream, liquefied natural gas terminals, and coal plants, and do not represent the firms' entire emissions footprint from energy investments."
"In the U.S. alone, there were 28 weather and climate disasters in 2023, resulting in at least $92.9 billion in disaster damages, according to the National Centers for Environmental Information," the report notes. "The need for transparency, accountability, and a just transition to a clean energy economy has never been more urgent."
The scorecard's authors and 22 supporting organizations—including Food & Water Watch, Friends of the Earth U.S., Greenpeace USA, LittleSis, Public Citizen, Rainforest Action Network, and Sierra Club—urge sources of capital, such as public pension funds and institutional investors, to commit to a series of climate-friendly policies and practices.
These include:
- Aligning with science-based climate targets to limit global warming to 1.5°C;
- Disclosing fossil fuel exposure, emissions, and impacts;
- Reporting a portfolio-wide energy transition plan;
- Integrating climate and environmental justice; and
- Providing transparency on political spending and climate lobbying.
"While companies like banks and oil majors face pressure over their climate risks and fossil fuel emissions, private equity firms continue to dodge the spotlight, pouring billions into fossil fuels and pushing us further from a sustainable future," said Global Emergy Monitor's Alex Hurley.
"These firms may operate in the shadows, but the public has a right to know how private equity's debt-fueled extraction of both resources and wealth threatens our climate, communities, and financial stability," Hurley added. "We call on private equity firms to adopt climate standards... and retire any fossil fuel assets in their portfolios in short order."
"At the end of the day, the price we pay for private equity's greed is our health and livelihoods, for ourselves and generations to come."
"Private equity firms and their executives are making billions by investing public employees' retirement money into planet-destroying fossil fuel assets," Amanda Mendoza, senior climate research and campaign coordinator of the Private Equity Stakeholder Project, said in a statement.
"These billion-dollar companies make their profits while largely avoiding liability for the damages their fossil fuel investing causes frontline communities," Mendoza added. "At the end of the day, the price we pay for private equity's greed is our health and livelihoods, for ourselves and generations to come."
According to the report, the five biggest investors in annual climate polluters are EIG Global Energy Partners, the Carlyle Group/NGP Energy Capital, Brookfield/Oakfield Capital Management, Quantum Capital Group, and BlackRock Private Equity Partners. These five firms each funded at least 100 million metric tons of CO2 equivalent (CO2e) annually.
Some of these companies, most notably BlackRock, rank among the
world's biggest investors in fossil fuels.
"Private equity continues to transform the financial markets and the daily lives of communities around the globe," the report states. "With over a trillion dollars in energy investments generating high greenhouse gas emissions and minimal public visibility, private equity firms play an outsized role in accelerating the climate crisis."
"The private equity energy portfolios covered in this report are responsible for an estimated combined total of 1.17 gigatons of annual emissions," the publication continues. "This figure equals 1.17 billion metric tons CO2 equivalent (CO2e) and is limited to the three categories covered in the scope of this research: upstream, liquefied natural gas terminals, and coal plants, and do not represent the firms' entire emissions footprint from energy investments."
"In the U.S. alone, there were 28 weather and climate disasters in 2023, resulting in at least $92.9 billion in disaster damages, according to the National Centers for Environmental Information," the report notes. "The need for transparency, accountability, and a just transition to a clean energy economy has never been more urgent."
The scorecard's authors and 22 supporting organizations—including Food & Water Watch, Friends of the Earth U.S., Greenpeace USA, LittleSis, Public Citizen, Rainforest Action Network, and Sierra Club—urge sources of capital, such as public pension funds and institutional investors, to commit to a series of climate-friendly policies and practices.
These include:
- Aligning with science-based climate targets to limit global warming to 1.5°C;
- Disclosing fossil fuel exposure, emissions, and impacts;
- Reporting a portfolio-wide energy transition plan;
- Integrating climate and environmental justice; and
- Providing transparency on political spending and climate lobbying.
"While companies like banks and oil majors face pressure over their climate risks and fossil fuel emissions, private equity firms continue to dodge the spotlight, pouring billions into fossil fuels and pushing us further from a sustainable future," said Global Emergy Monitor's Alex Hurley.
"These firms may operate in the shadows, but the public has a right to know how private equity's debt-fueled extraction of both resources and wealth threatens our climate, communities, and financial stability," Hurley added. "We call on private equity firms to adopt climate standards... and retire any fossil fuel assets in their portfolios in short order."
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US Leads Charge as Surge of Oil and Gas Projects Threaten Hope for Livable Planet
"The science is clear: No new oil and gas fields, or the planet gets pushed past what it can handle," said one analyst.
Mar 28, 2024
Fossil fuel-producing countries late last year pledged to "transition away from fossil fuels," but a report on new energy projects shows that with the United States leading the way in continuing to extract oil and gas, governments' true views on renewable energy are closer to a statement by a Saudi oil executive Amin Nasser earlier this month.
"We should abandon the fantasy of phasing out oil and gas," the CEO of Saudi Aramco, the world's largest oil company, said at an energy conference in Houston.
A new report published Wednesday by Global Energy Monitor (GEM) suggests the U.S. in particular has abandoned any plans to adhere to warnings from climate scientists and the International Energy Agency (IEA), which said in 2021 that new oil and gas infrastructure has no place on a pathway to limiting planetary heating to 1.5°C.
Despite the stark warning, last year at least 20 oil and gas fields worldwide reached "final investment decision," the point at which companies decide to move ahead with construction and development. Those approvals paved the way for the extraction of 8 billion barrels of oil equivalent (boe).
By the end of the decade, companies aim to sanction nearly four times that amount, producing 31.2 billion boe from 64 oil and gas fields.
The U.S. led the way in approving new oil and gas projects over the past two years, GEM's analysis found.
An analysis by Carbon Brief of GEM's findings shows that burning all the oil and gas from newly discovered fields and approved projects would emit at least 14.1 billion tonnes of carbon dioxide.
"This is equivalent to more than one-third of the CO2 emissions from global energy use in 2022, or all the emissions from burning oil that year," said Carbon Brief.
GEM noted in its analysis that oil companies and the policymakers who continue to support their planet-heating activities have come up with numerous "extraction justifications" even as the IEA has been clear that new fossil fuel projects are incompatible with avoiding catastrophic planetary heating.
The report notes that U.S. Sen. Lisa Murkowski (R-Alaska) "supported ConocoPhillips' Willow oil field, arguing that the Alaskan oil and gas industry has a 'better environmental track record,' and not approving the project 'impoverish[es] Alaska Natives and blame[s] them for changes in the climate that they did not cause.'"
Carbon Brief reported that oil executives have claimed they are powerless to stop extracting fossil fuels since demand for oil and gas exists for people's energy needs, with ExxonMobil CEO Darren Woods telling Fortune last month that members of the public "aren't willing to spend the money" on renewable energy sources.
A poll by Pew Research Center last year found 67% of Americans supported the development of alternative energy sources. Another recent survey by Eligo Energy showed that 65% of U.S. consumers were willing to pay more for renewable energy.
"Oil and gas producers have given all kinds of reasons for continuing to discover and develop new fields, but none of these hold water," said Scott Zimmerman, project manager for the Global Oil and Gas Extraction Tracker at GEM. "The science is clear: No new oil and gas fields, or the planet gets pushed past what it can handle."
Climate scientist and writer Bill McGuire summarized the viewpoint of oil and gas executives and pro-fossil fuel lawmakers: "Climate emergency? What climate emergency?"
The continued development of new oil and gas fields, he added, amounts to "pure insanity."
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Global Coal Phaseout Must Speed Up to Avert 'Climate Chaos': Analysis
"The transition away from existing and new coal isn't happening fast enough," said one expert. "The more new coal projects come online, the steeper the cuts and commitments need to be in the future."
Apr 06, 2023
To avert the worst consequences of the climate crisis, the world must stop building new coal plants and shut down existing ones at nearly five times the current rate.
That's according to an analysis published Wednesday by Global Energy Monitor (GEM) and nearly a dozen other groups, including Reclaim Finance, the Sierra Club, and the Alliance for Climate Justice and Clean Energy.
GEM's ninth annual survey of the world's existing and proposed supply of coal-fired power—the largest single source of energy-related CO2 emissions—found that "outside China, the global coal pipeline is drying up," albeit not at a quick enough pace.
"Urgent action is necessary to ensure an end to coal and a fighting chance at a livable climate."
Seventeen countries retired a combined 26 GW of operating coal capacity in 2022. Meanwhile, 25 GW of operating coal capacity received an announced close-by date of 2030.
However, to meet the Paris agreement's goal of limiting global warming to 1.5°C above preindustrial levels—beyond which the climate emergency's impacts will grow even deadlier, especially for humanity's poorest members who bear the least responsibility for the crisis—coal power must be phased out completely by 2040. To stay on track while giving developing countries extra time to switch to renewables, high-income countries in the Organization for Economic Cooperation and Development (OECD) must shutter their coal plants by 2030.
This "would require an average of 117 GW of retirements per year, or four-and-a-half times the capacity retired in 2022," according to the report. "An average of 60 GW must come offline in OECD countries each year to meet their 2030 coal phaseout deadline, and for non-OECD countries, 91 GW each year for their 2040 deadline. Accounting for coal plants under construction and in consideration (537.1 GW) would require even steeper cuts."
Lead author Flora Champenois, the project manager for GEM's Global Coal Plant Tracker, said in a statement that "the transition away from existing and new coal isn't happening fast enough to avoid climate chaos."
"The more new projects come online, the steeper the cuts and commitments need to be in the future," she noted.
Last year, the world added 45.5 GW of new coal capacity, meaning that the operating coal fleet grew by 19.5 GW overall.
"Fourteen countries commissioned new coal power in 2022," the report notes. "More than half (59%) of the newly commissioned capacity was in China (25.2 GW), with a remaining 16% in South Asia (India, Pakistan, and Bangladesh), 11% in Southeast Asia (Vietnam, Philippines, Indonesia, and Cambodia), 9% in East Asia (Japan and South Korea), and 5% in other regions."
Outside China, the global coal fleet continued to shrink in 2022 as planned projects were canceled and old plants closed. But coal retirements slowed down compared with previous years due in large part to Russia's invasion of Ukraine, which sent gas prices soaring.
\u201c\ud83c\uddea\ud83c\uddfa retired only 2.2 GW last year after a record 14.6 GW, but coal is not making the comeback many expected from the energy crisis. The rebound in retirements in the next few years could make up for the lower than expected retirements in 2022.\u201d— Global Energy Monitor (@Global Energy Monitor) 1680739205
"While coal under development—or coal in pre-construction and construction—has collapsed by two-thirds since the Paris agreement, nearly 350 GW of new capacity is still proposed across 33 countries, and an additional 192 GW of capacity is under construction," the report notes. "China's pre-construction and construction capacity surpassed the rest of the world's in 2021, and the gap widened in 2022. New coal capacity under development in China increased by 38% (266 GW to 366 GW), while the capacity in the rest of the world decreased by 20% (214 GW to 172 GW). China now accounts for two-thirds (68%) of global capacity under development, up from 55% a year ago."
Wednesday's analysis follows the Intergovernmental Panel on Climate Change's (IPCC) latest warning that burning existing fossil fuels will consume the world's remaining "carbon budget," or the maximum amount of planet-heating pollution compatible with preventing temperature rise from exceeding 1.5°C. The IPCC has made clear the need for "rapid and deep, and in most cases immediate greenhouse gas emission reductions."
Upon the publication of the IPCC's assessment two weeks ago, United Nations Secretary-General António Guterres outlined "an 'Accelerated Agenda' renewing calls for an immediate end to new coal, and for a phaseout of existing coal by 2030 in developed countries and 2040 in the rest of the world," GEM's new report points out. "Under such a scenario, only 70% of OECD operating coal capacity is currently on pace (330 GW), and outside the OECD, only 6% of coal capacity has a known closure date before 2040 (93 GW)."
"Urgent action is necessary to ensure an end to coal and a fighting chance at a livable climate," the report adds. "To accomplish this, countries need to translate announcements into plant-by-plant retirement plans as well as ramp up phaseout commitments. Details on how current and future policies and funds will be implemented to impact coal retirement dates and ensure a swift and equitable end to new coal will be essential."
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