Private Equity Climate Risks: Top Firms in 2026

Key Facts

• The 2024 PE Climate Risk Scorecard tracks 21 major private equity firms, with 8 of the largest collectively managing approximately $3.6 trillion in assets under management.
• The energy portfolios of these leading PE firms generate 1.17 gigatons of CO2-equivalent emissions annually, equal to the electricity consumption of hundreds of millions of U.S. homes.
• As of July 2024, 67% of the combined energy portfolios of the 21 scored firms remain invested in fossil fuels, including upstream oil and gas, LNG terminals, and coal-fired power plants.
• Fund managers have deployed over $1 trillion in energy investments since 2010, the majority directed toward fossil fuel assets rather than renewables or clean energy.
• Air pollution from select PE-backed fossil fuel infrastructure causes an estimated $11 to $15 billion in annual health damages to U.S. communities, according to a June 2025 independent energy research brief.
• Thirteen of 20 scored firms maintained fossil fuel investments in the Global South through at least July 2025, spanning 32 countries including Nigeria, Indonesia, India, and Colombia.
• Regulatory pressure is intensifying: SEC climate disclosure rules, EU Taxonomy compliance, and ESG mandates from pension fund limited partners are reshaping how buyout firms account for transition risk and stranded assets.

Private Equity Climate Risks: Market Overview

The universe of private equity climate risks covers large and mid-size PE firms holding vast fossil fuel portfolios with far less mandatory disclosure than their publicly traded counterparts. Fund managers have deployed over $1 trillion in energy investments since 2010. The energy portfolios of the 21 largest tracked firms now generate 1.17 gigatons of annual CO2-equivalent emissions, placing private equity alongside the world's largest industrial emitters.

Most of these holdings remain invisible to public markets. Traditional buyout firms and infrastructure PE investors face mounting exposure through stranded assets, transition risk from tightening carbon policy, and physical risk to long-duration energy assets. Climate-focused funds and impact investors are simultaneously capturing the energy transition opportunity as LP capital seeks Paris-aligned alternatives.

Most major firms are headquartered in New York and other U.S. cities, while their fossil fuel portfolio companies operate increasingly in the Global South. Thirteen of 20 scored firms held assets across 32 countries including Algeria, Colombia, and Vietnam, often without disclosure to local communities or end-investors. Regulatory frameworks including TCFD, the EU's Sustainable Finance Disclosure Regulation (SFDR), and proposed SEC climate rules are closing that disclosure gap, forcing fund managers to confront emissions reporting and energy transition planning as core fiduciary obligations.

Firm Comparison at a Glance

The table below covers 12 major PE firms evaluated in the 2024 PE Climate Risk Scorecard. Scorecard grades (A to F) reflect fossil fuel portfolio concentration, GHG emissions disclosure completeness, TCFD alignment, Science-Based Targets (SBTi) commitments, and energy transition planning. A dash indicates data was not publicly disclosed.

Scorecard grades from the 2024 PE Climate Risk Scorecard. KKR's 78% fossil fuel energy portfolio share and 93 million tons of undisclosed carbon emissions are from an independent PE climate research report published in April 2024.

Apollo stands out among large diversified buyout firms for receiving comparatively stronger marks in the 2024 scorecard, while Carlyle, Warburg Pincus, and KKR occupy the bottom three positions for disclosed emissions, fossil fuel concentration, and lack of transition planning.

Top Picks by Climate and Strategy Profile

Worst Overall Climate Scorecard: The Carlyle Group ranks last (F grade) among all 21 scored firms, with power plants emitting substantial CO2-equivalent in 2021 and no comprehensive energy transition plan disclosed.

Greatest Undisclosed Emissions Risk: KKR carries 78% fossil fuel concentration in its energy portfolio. An independent April 2024 climate research report identified 93 million metric tons of carbon emissions linked to KKR that had not been publicly disclosed, the largest single-firm opacity gap in the research.

Most Actively Expanding Coal Exposure: Energy Capital Partners is purchasing Blackstone's General J.M. Gavin coal plant in Ohio in 2024, signaling continued appetite for coal assets despite LP pressure and regulatory headwinds.

Highest Scorecard Grade Among Large Diversified Firms: Apollo Global Management received notably stronger marks in the 2024 energy scorecard relative to peers, making it the most defensible large-cap allocation for ESG-constrained limited partners.

Largest Fossil and Renewable Infrastructure Footprint: Brookfield Asset Management straddles both sides of the energy transition through its infrastructure arm and its Oaktree subsidiary, ranking fourth-worst overall but presenting a credible engagement target for climate-focused LPs given its dual exposure.

Specialist Cluster with Concentrated Health Impact: ArcLight Capital Partners, Energy Capital Partners, and Quantum Capital Group collectively account for roughly 20% of PE-backed fossil fuel health impacts across U.S. communities, despite representing a fraction of total sector AUM.

Largest Growth Equity Exposure to Fossil Energy: Warburg Pincus holds the second-worst scorecard ranking among all evaluated firms, carrying significant fossil fuel exposure through its growth equity mandate at a time when LP scrutiny of energy-stage deals is accelerating.

Top Firms in Detail

The Carlyle Group

The Carlyle Group holds the lowest climate rating of any evaluated firm, receiving an F grade in the 2024 scorecard. Headquartered in Washington, D.C., this diversified buyout firm's power plants emitted substantial CO2-equivalent in 2021, and the firm has not disclosed a comprehensive energy transition plan to investors or the public. The absence of Scope 1, Scope 2, and Scope 3 emissions reporting across portfolio companies compounds the disclosure problem. Institutional LPs subject to ESG mandates from pension fund trustees face the highest reputational and regulatory risk from continued allocation to Carlyle without firm-specific climate commitments. Any allocation decision should begin with demanding a portfolio-wide decarbonization roadmap as a condition of commitment.

KKR

KKR presents the most quantified undisclosed emissions risk of any firm in the cohort. Seventy-eight percent of its energy portfolio companies invest in fossil fuels, concentrated in gas and LNG transportation and storage assets. An independent climate research report published in April 2024 identified 93 million metric tons of carbon emissions linked to KKR that had not been publicly disclosed, a figure roughly equivalent to the annual emissions of 20 million gasoline-powered vehicles. For LPs evaluating portfolio-level carbon footprint, that opacity gap represents a material value-at-risk exposure if carbon pricing mechanisms tighten. KKR's scale, as part of the $3.6 trillion 8-firm cohort, means even partial decarbonization of its energy holdings would have outsized market impact.

Blackstone

Blackstone's most visible climate risk transaction is also a cautionary example of how fossil fuel assets circulate within the PE sector. The firm sold its General J.M. Gavin coal plant in southeastern Ohio to Energy Capital Partners in 2024. That facility causes an estimated $1.7 billion in annual human health damages, accounting for roughly 19% of all PE-backed fossil fuel health impacts measured in a June 2025 independent energy research study. Blackstone ranked seventh among the eight originally scored firms and sits within the $3.6 trillion combined AUM cohort. Pension fund allocators reviewing Blackstone should track which portfolio companies remain in fossil fuel energy post-Gavin divestiture, since one exit does not indicate a systemic transition plan.

Apollo Global Management

Apollo earned comparatively stronger marks in the 2024 energy scorecard than all but a handful of the 21 evaluated firms, making it the most defensible large-cap buyout allocation for ESG-constrained institutional investors. Operating across buyout and credit strategies from its New York headquarters, Apollo's diversified approach has reduced its concentrated fossil fuel exposure relative to energy-specialist peers. No individual AUM figure for Apollo's energy holdings is publicly broken out, but its broader credit platform offers debt-focused pathways into energy transition assets. For limited partners at pension funds and endowments seeking a large-cap PE allocation with lower climate risk litigation exposure, Apollo's 2024 scorecard performance is the benchmark to reference during GP evaluation.

Warburg Pincus

Warburg Pincus holds the second-worst climate scorecard ranking among all 21 evaluated firms, a notable position given its growth equity mandate. The firm invests in energy-stage companies from its New York base, meaning its fossil fuel exposure runs through portfolio companies often earlier in their development cycle and harder to divest without value destruction. Growth equity structures give general partners more direct influence over portfolio company operations than buyout structures, which makes Warburg Pincus's low scorecard rank a governance concern as well as an emissions one. LPs allocating to growth equity in the energy sector should demand an explicit SBTi commitment and a documented energy transition plan before committing capital.

Brookfield Asset Management

Brookfield occupies a uniquely complex position in the PE climate risk landscape. The Toronto-based infrastructure and real assets firm ranks fourth-worst in the scorecard, yet its subsidiary Oaktree Capital Management operates across credit and distressed strategies that include both fossil fuel and transition energy assets. Brookfield's broader infrastructure platform spans fossil fuel pipelines and power assets alongside a separately branded renewable energy platform, creating a dual exposure structure. That duality makes Brookfield the most credible large-scale engagement target for climate-focused LPs who want leverage over both legacy fossil holdings and new transition asset allocation simultaneously. Engaging Brookfield at the LP advisory committee level, before fund close, maximizes influence.

ArcLight Capital Partners

ArcLight Capital Partners is a Boston-based energy infrastructure specialist whose concentrated fossil fuel holdings place it among the most impactful firms in an independent PE-backed health damage study. Together with Energy Capital Partners and Quantum Capital Group, ArcLight accounts for roughly 20% of the $11 to $15 billion in annual U.S. health damages attributed to PE-backed fossil fuel infrastructure. ArcLight focuses on midstream and downstream energy infrastructure, a segment with long asset lifespans that makes stranded asset risk particularly acute under aggressive carbon pricing scenarios. Financial advisors conducting portfolio-level ESG audits for institutional clients should apply the most granular environmental due diligence to ArcLight given its concentrated exposure and limited public climate disclosure.

Energy Capital Partners

Energy Capital Partners made the single most consequential fossil fuel acquisition in PE's 2024 deal flow by purchasing Blackstone's General J.M. Gavin coal plant in southeastern Ohio. The Gavin plant is the most harmful PE-backed facility identified in a June 2025 independent energy research study, generating an estimated $1.7 billion in annual health damages representing 19% of all study-identified impacts. Headquartered in Short Hills, NJ, Energy Capital Partners focuses on power generation and energy infrastructure, including coal and gas-fired plants. The Gavin acquisition signals that some energy-specialist PE investors view coal assets as viable despite regulatory headwinds, elevating both transition risk and reputational exposure for any LP with a net zero or Paris-aligned mandate.

Quantum Capital Group

Quantum Capital Group brings deep Permian Basin expertise as a Houston-based upstream and midstream energy specialist, and that geographic concentration creates a specific physical risk profile. Permian Basin operations expose holdings to both acute weather events and the chronic regulatory pressure facing U.S. oil and gas extraction. Quantum's focused mandate places it among the highest fossil fuel concentration players in the entire scorecard cohort. Its health impact footprint, shared with ArcLight and Energy Capital Partners in the 20% cluster, reflects midstream and upstream operations rather than power generation. Institutional LPs conducting climate risk scenario planning should include explicit analysis of stranded asset risk under 1.5°C and 2°C transition pathways for Quantum.

BlackRock Global Infrastructure Partners (GIP)

BlackRock Global Infrastructure Partners entered a new ownership structure in 2024 when BlackRock completed its acquisition of GIP. The New York-based infrastructure firm holds energy assets spanning both fossil and transition sectors, similar in profile to Brookfield but with BlackRock's global distribution and balance sheet now behind it. GIP was included in the 2024 scorecard research and tracked as part of the Global South fossil fuel asset analysis. The BlackRock acquisition adds a significant public markets accountability dimension, since BlackRock as a listed company faces disclosure requirements that the formerly independent GIP did not. Researchers and institutional allocators should monitor whether BlackRock's public company obligations produce more granular climate disclosure for the GIP portfolio going forward.

Investment Trends and Capital Flows

LNG Expansion and Gas Infrastructure

KKR's gas and LNG transportation and storage investments exemplify a sector-wide pattern: PE firms continue acquiring LNG terminals and gas pipelines even as their limited partners demand energy transition commitments. Independent climate researchers found that gas-fired power plants alone add 82 million metric tons of CO2-equivalent per year to the PE sector's tracked emissions, equivalent to the annual electricity use of 17 million U.S. homes. That figure represents a material expansion of the sector's previously tracked emissions footprint.

Coal Plant Acquisitions Against the Transition

Energy Capital Partners' 2024 purchase of the Gavin coal plant from Blackstone illustrates how coal assets continue circulating within PE rather than being retired. A parallel transaction involving another Ohio coal plant by a separate PE group in 2024 reinforces that the sector has not adopted a unified exit stance on coal, despite mounting LP scrutiny and carbon pricing risk.

Global South Fossil Fuel Burden-Shifting

Thirteen of 20 scored firms maintain fossil fuel investments across 32 Global South countries including Nigeria, Indonesia, and Colombia. These assets are predominantly owned by firms headquartered in the United States. Nearly half of the 123 tracked Global South fossil fuel assets demonstrated economic, social, or environmental risk events while under PE ownership, raising both operational risk and climate litigation exposure for GP fund managers.

LP Pressure and the ESG Disclosure Mandate

Pension funds, endowments, and institutional LPs managing retirement capital are increasingly demanding TCFD alignment and SBTi commitments as conditions of capital commitment. Proposed SEC climate disclosure rules and EU SFDR mandates are extending obligations into private markets, narrowing the regulatory gap that previously allowed PE firms to operate with minimal emissions reporting. Uncommitted capital is becoming harder to raise from ESG-mandated allocators without documented energy transition plans.

How to Evaluate PE Firms on Climate Exposure

The 2024 PE Climate Risk Scorecard is the primary baseline tool, grading 21 major fund managers on an A-to-F scale. Criteria include fossil fuel portfolio percentage, GHG emissions disclosure completeness, TCFD alignment, SBTi commitment, energy transition plans, and climate lobbying transparency. Start any LP due diligence process by requesting a firm's most recent scorecard grade and the underlying data it submitted.

Fossil fuel portfolio concentration above 67% warrants heightened scrutiny: that figure represents the sector average, and firms above it carry elevated stranded asset risk under any credible decarbonization scenario. GHG emissions disclosure should cover Scope 1, Scope 2, and Scope 3 emissions across portfolio companies. The absence of disclosure is itself a red flag, as the KKR case demonstrates with 93 million undisclosed metric tons flagged by independent researchers.

Red flags checklist:

• F grade or bottom-quartile scorecard ranking
• No GHG emissions disclosure at fund level
• Acquisition of coal or LNG assets without a defined transition timeline
• Undisclosed fossil fuel holdings in Global South countries
• No TCFD-aligned climate risk report published
• No energy transition plan with measurable milestones
• Active lobbying against climate disclosure mandates with no transparency

For quantitative risk modeling, climate risk platforms can map physical and transition risks across more than 200 sectoral transition pathways. Carbon footprint assessment tools enable portfolio-level scenario planning that translates IPCC climate scenarios into projected EBITDA impact and value-at-risk estimates.

Engage general partners on decarbonization timelines before fund close, not after. LP advisory committee participation provides a structural venue to demand quarterly emissions reporting as a condition of re-up investment.

Which Firm Fits Your Needs?

Institutional limited partners at pension funds and endowments operating under fiduciary duty obligations face the starkest choice in this cohort. Apollo's comparatively stronger 2024 scorecard performance makes it the most defensible large-cap buyout allocation for ESG-mandated allocators. Carlyle and Warburg Pincus carry the highest combined reputational, regulatory, and stranded asset risk for the same investors. Any pension fund currently allocated to the bottom three scorecard firms should prepare engagement letters demanding TCFD-aligned reporting by the next fund close.

Climate-focused LPs seeking to pressure incumbent PE firms rather than simply exit will find Brookfield's dual fossil and renewable infrastructure portfolio the most credible engagement opportunity at scale. Its combined exposure to legacy fossil assets and transition infrastructure means a well-structured LP engagement campaign can push for accelerated decarbonization timelines without requiring divestiture from a firm with zero renewable exposure.

Financial advisors and ESG consultants conducting portfolio-level audits should treat ArcLight, Energy Capital Partners, and Quantum Capital Group as requiring the most granular environmental due diligence of any firms in the cohort. Their concentrated upstream, midstream, and coal power exposure, combined with shared responsibility for roughly 20% of PE-backed U.S. health damages, means standard questionnaire-based ESG screening is insufficient. Asset-level data from independent fossil fuel asset trackers is necessary for a complete risk picture.

Methodology

This guide on private equity climate risks draws primarily from the 2024 PE Climate Risk Scorecard, which evaluated 21 major firms on fossil fuel exposure, emissions disclosure, TCFD alignment, SBTi commitments, and energy transition planning. The scorecard's primary dataset reflects conditions as of July 2024. Health impact data are from an independent energy research brief published in June 2025, which quantified $11 to $15 billion in annual U.S. health damages using the EPA's COBRA assessment tool. Global South asset tracker data are current through July 2025. No individual firm AUM figures were independently verified; where individual figures were unavailable, the $3.6 trillion combined figure for the 8-firm original cohort is used as noted.