Renewable and environmental projects are being funded by the same investment vehicles profiteering from war, the ecological crisis and global warming. The hypocrisy is mind-blowing.
Your favourite festival. That new wind farm. The print arm of an international news corporation. Sports investments. Pension providers. Defence contractors.
Very different types of businesses, in reality stakes and total ownership can often be traced to private equity firms with wildly diverse portfolios. So what happens when the core mission — delivering the best possible return for investors — leads to a major conflict of interest?
It’s a question that struck us in August 2025, when Greenvolt — a 100% renewable energy group with operations in 20 global regions — announced a €150 million share capital increase thanks to money from Kohlberg Kravis Roberts & Co. Also known as KKR, it’s one of the world’s largest asset management and private equity entities. At the time of writing market capitalisation was some $92 billion.
It’s also one of the most controversial, with interests in everything from music events giant Superstruct — which runs around 80 European festivals — to Israeli cybersecurity contractors. According to Global Energy Monitor, it also maintains 188 fossil fuel assets across 21 countries through 17 portfolio companies. And it’s by no means an outlier.
‘When we started our work, we were looking at individual private equity firms and really doing a very deep dive on what they own in the energy space. One of which looked at KKR. We have now broadened our approach to cover around 20 firms,” says Alex Hurley of Global Energy Monitor. ‘KKR is one of the largest, just based on the amount of money they manage. As of April 2024, we estimated it was responsible for almost 100 million metric tonnes of greenhouse gases from fossil fuel investments, annually.’
The opaque nature of private equity firms means tracking the flow of money is difficult. The fact much of their associated environmental impact is tied to investments, and therefore falls under the famously confusing scope 3 emissions type, means gauging footprints in real terms is equally hard. Nevertheless, Hurley and Global Energy Monitor have quantified the consequences.
‘If you look at [KKR’s] scope 1 and 2 emissions, which they disclose freely, scope 3 is around 6,500 times larger,’ he explains. ‘Basically their corporate emissions are meaningless compared to what they invest in. And they’re a private equity firm, so investment is the primary activity. If we’re talking about where the rubber meets the road, it’s the investments we should really care about. And it’s the investments people who put money into these firms should care about — limited partners, pensions funds, insurance schemes, college endowments. Large pools of money. If the asset owners care about how that is being used, picking the right private equity firm is a very big deal.’
Alongside Private Equity Stakeholder Project and Americans for Financial Reform, Global Energy Monitor runs Private Equity Climate Risks. The joint endeavour analyses fossil fuel investments from investment firms, and the risk these pose to the climate crisis. The most recent report, November 2025, shows the 20 largest and most influential private equity companies have interests in almost 60 gigawatts of gas-fired projects globally. That’s equivalent to, or more than, the capacity of every country on Earth apart from six — the United States, China, Russia, Saudi Arabia, Japan and Iran. When the assessment was published a further 5.9 gigawatts was also in the pipeline.
‘One of the largest sources of investment [into private equity] comes from public pension funds. And, you know, the industry is notoriously shadowy, things are behind closed doors, but the pension side is one way you can get some access as to where money is going,’ says Nichole Heil of Private Equity Stakeholder Project. ‘It’s second or third degree access, but there is some influence and ability to hold private equity accountable. The Chicago teachers pension fund is a good example — they were considering re-upping an investment, I think in KKR. In part due to our research, they decided not to do this because of the track record on climate, based on the emissions data we had. They wanted to move in a more sustainable direction.
‘Another report we authored looked at false solutions in private equity — we are seeing an increase in what’s often called energy transition funds… However, again, there’s no clear disclosures, there’s no accountability to any of this. So it’s difficult to tell the extent to which these funds are invested in things like false solutions, in comparison with proven solutions to the climate crisis. What that means is that they are putting money into things like carbon trading, or hydrogen, which is really controversial. [Also] nuclear energy. There’s just no common ground or agreement on what constitutes a true solution.’
Grant Nicholson also says transparency is key to determining whether private equity investments amount to greenwashing, or a genuine force for good in the net zero transition. Founder and CEO of Leeds, UK-based investment and operating firm Pharaoh Capital Group, which specialises in energy projects, he says from an industry perspective diversity of portfolio — say, renewables and fossil fuels — isn’t necessarily the issue when the bottom line is making as much money as possible for stakeholders. The real problem lies in the fundamental intention and commitment to tackling the climate crisis. Or not.
‘The more legitimate question is about capital allocation and influence — if the same institutions financing renewables are also expanding fossil fuel or defence positions, are they using green infrastructure as a genuine transition strategy? Or as a diversification and PR hedge alongside business-as-usual elsewhere?,’ he tells us. ‘In practice, most large pools of capital — pension funds, insurers, diversified asset managers — are, by design, invested across the whole economy. That’s not necessarily hypocrisy; it’s how diversified capital works. The issue arises when that diversification is used to obscure genuine conflicts of interest, or where lobbying and disclosure practices are inconsistent with a firm’s public green positioning.’
All of which raises the biggest quandary of all. With the International Energy Agency estimating worldwide annual clean energy investment needs to hit around $4.8 trillion per year within the next decade to keep pace with 2050 carbon targets, is net zero even achievable without finance from sources that are simultaneously contributing to the same crisis? For Nicholson, the simple answer is ‘no’. Perhaps more importantly, though, he doesn’t think ‘it’s a useful goal to chase’. Instead, ‘the more productive framing is directional rather than binary: every pound that moves from a fossil fuel-linked balance sheet into renewable infrastructure is a pound doing useful work’.
Rather than gatekeeping to stop all but the most ‘ideologically pure finance’ being used, he says there are some simple ways in which clean energy investment could become much cleaner. Echoing Hurley and Heil, this means clearer disclosure of who is behind each fund and what other interests they have, so clients can make more informed choices. Standardised, independently verified impact reporting is also needed. As is improved due diligence, particularly at lower value levels which often escape the scrutiny larger vehicles are subject to. Financial structures must also be aligned to the underlying asset. ‘The more that lending and investment returns are tied directly to the performance and cash flows of the renewable asset itself, the harder it is for finance to become disconnected from genuine impact.’
More on climate funding:
Regions with worst air pollution have least funding to tackle it
Funding uncertainty is slowing down Defra’s Nature for Climate Programme
Nottinghamshire councils share £18m energy efficiency funding as bills fall