Carlyle stands out among large diversified private equity firms as having one of the largest energy portfolios—most of it devoted to fossil fuels.

The Carlyle Group’s lopsided energy portfolio has approximately $22.4 billion in carbon-based energy, and $1.4 billion (less than 1 percent of assets under management) committed to renewable and sustainable energy companies.


Exploiting regulatory exemptions and loopholes, private equity firms like Carlyle have become major greenhouse gas polluters, far away from public scrutiny and with minimal regulatory oversight. Private equity firms stand ready to swoop in and acquire polluting assets sold by publicly-listed companies under public and investor pressure to cut emissions from their operations. Furthermore, large institutional investors such as university endowments, philanthropic foundations, and public pension funds that have set ambitious decarbonization goals to mitigate climate risks in their portfolios are still heavily invested in private equity firms financing polluting assets.

Operating in the most opaque corners of the market, private equity firms have become a significant source of capital for companies engaged in the exploration, extraction, transportation, storage, processing and burning of oil, coal, and natural gas.

Energy investments did some heavy lifting for Carlyle’s profits in 2022, generating around half of the firm’s overall net income, mainly from over $660 million in investment income from NGP Energy, an oil and gas subsidiary.


This study pierces through the private equity veil of secrecy and finds that Carlyle invested billions of dollars in fossil fuel assets which have dumped at least 277 million metric tons of CO2 and other greenhouse gasses into the atmosphere from 2011 to 2021, contributing to the global climate crisis, and harming low-income communities and communities of color on a disproportionate basis.

Carlyle’s energy portfolio is lopsided, making 94% of its energy investments in fossil fuels.

Private equity: the only game in town for divested assets

Private equity’s stealth expansion in the fossil fuel sector has become an additional, unique obstacle to achieving emissions reductions. As public, investor and regulatory pressure tightens in public markets, utilities and major public companies are increasingly migrating their fossil fuel assets to less regulated ownership. These facilities continue operating, pumping warming gasses into the atmosphere away from public scrutiny and with minimal regulatory oversight.


Selling off their highest-polluting assets—instead of discontinuing them or phasing them out—to quickly wipe out tons of CO2 from their footprint allows the sellers to greenwash the public and peddle their “evolution as clean energy” companies or as “leader[s] in the zero-carbon transition,” as CEOs of major utilities have put it, while their emissions are merely transferred, not removed from the system entirely. “Yes, we finally unloaded that piece of crap in Denmark we’ve been trying to sell for decades,” a Shell executive wrote in an email about a refinery sold to a private equity firm, an exchange which Shell touted in a press release as “support[ing] our ambition to be a net-zero emissions energy business by 2050 or sooner.”

Private equity firms have emerged as “pollution financiers of last resort,” acquiring divested dirty assets. Divestment promises are also gaining momentum in academic endowments, philanthropic foundations, and state and local governments. But many of these institutional investors are still heavily invested in private equity, including in companies deep in polluting assets—like Carlyle.


Carlyle Group has a heavily fossil fuel-focused energy portfolio, with $22.4 billion in carbon-based energy and only $1.4 billion in renewable energy.

Carlyle’s energy investments significantly contributed to the firm’s earnings, generating around half of profits in 2022.

Private equity firms like Carlyle exploit regulatory exemptions and loopholes to contribute to greenhouse gas emissions without much public scrutiny or oversight.

Carlyle’s fossil fuel investments from 2011 to 2021 emitted an estimated 277 million metric tons of CO2e, with yearly emissions exceeding those of entire countries.

Navigating climate risks: A guide for institutional investors

Institutional investors face significant climate risks through private equity’s investments in fossil fuels. To safeguard investments and contribute to a sustainable future, consider the following steps:

  • Demand Transparency: 
    Request private equity managers to align their portfolios with science-based targets, keeping within a 1.5 degree Celsius warming pathway. Ask for full disclosure of fossil fuel holdings, emissions (Scopes 1, 2, and 3), energy transition plans, and climate lobbying efforts.
  • Evaluate Transition Strategies:
    Assess how well private equity firms are adapting their portfolios and energy strategies for the clean energy transition.
  • Prioritize Climate & Environmental Justice:
    Ensure private equity firms integrate climate and environmental justice considerations, accounting for the communities and workforces impacted by the climate crisis in their investment strategies.
  • Reallocate Capital: 
    Shift capital investments toward private equity firms credibly transitioning away from fossil fuels and providing transparency about their holdings, emissions, and impacts.

Analysis is developed jointly by researchers from Americans for Financial Reform Education Fund, Global Energy Monitor, and the Private Equity Stakeholder Project. 

About Americans for Financial Reform Education Fund
Americans for Financial Reform Education Fund (AFREF) is a nonpartisan, nonprofit coalition of more than 200 civil rights, community-based, consumer, labor, business, investor, faith-based and civic groups, along with individual experts. Our mission is to fight to create a financial system that deconstructs systemic racism and inequality and promotes a just and sustainable economy. Follow AFREF at and on Twitter @RealBankReform.

About Global Energy Monitor
Global Energy Monitor (GEM) develops and shares information in support of the worldwide movement for clean energy. By studying the evolving international energy landscape, creating databases, reports, and interactive tools that enhance understanding, GEM seeks to build an open guide to the world’s energy system. Users of GEM’s data and reports include the International Energy Agency, United Nations Environment Programme, the World Bank, and the Bloomberg Global Coal Countdown. Follow GEM at and on Twitter @GlobalEnergyMon.

About the Private Equity Stakeholder Project
The Private Equity Stakeholder Project (PESP) is a nonprofit organization with a mission to identify, engage, and connect stakeholders affected by private equity with the goal of engaging investors and empowering communities, working families, and others impacted by private equity investments. Follow PESP at and on Twitter @PEstakeholder.