As the climate crisis worsens and emissions get more scrutiny, what major companies decide to disclose is increasingly important.
Carlyle’s largest oil and gas investment, NGP, was not included. A “note on scope” halfway through the document said this was due to a “different business model.”
The company, which has 26 offices around the world, almost 2,000 staff and
Carlyle said this was its first such portfolio-level analysis. The company emphasizes its climate credentials, and an introductory note by then CEO
“They are telling one story to investors and doing something else that gets results,” said Dr.
NGP is also a private equity firm, originally called
“Carlyle’s future investments in carbon-based energy are expected to be made primarily through NGP in the
NGP makes up some 8% of Carlyle total earnings on average over the last five years, the company said in an email. But due to high oil and gas prices since the
That’s because
Carlyle, headquartered in
The company filing was made in accordance with 2017 guidelines issued by the
Under the TCFD guidelines, companies are told to disclose climate pollution by firms in which they invest, “if appropriate.” Carlyle’s report said its emissions for its largest majority-owned funds in 2021 were the equivalent of 79 metric tons of carbon dioxide per million dollars of revenue.
In light of this case, Guira called for reform of the TCFD to eliminate any wiggle room in disclosures.
Founded in 1988, NGP owns portions of more than a dozen energy companies. These include
Another NGP investment, Crimson Midstream, a holding company, is linked to a major oil spill. Crimson Pipeline, which was registered to the same address in
NGP, which invested in Crimson in 2012 and then sold it last year, had no comment on this incident. It seeks to be a “performance leader” among responsible energy owners, the NGP spokesperson said. “We work closely with our portfolio companies to monitor environmental performance (and) set ambitious goals for performance improvement.” Crimson declined to comment.
Field, of
“The private equity people I talk to are making money hand over fist in a way they weren’t a couple of years ago,” he said. “Of course they want to be in this space.”
Carlyle is not the only company to come under fire over emissions disclosure in recent years, and by some measures could be considered a leader in its field. The non-profit CERES, which argues for a more sustainable economy, found in 2021 that only two private equity firms of those it interviewed had released standalone TCFD reports, Carlyle one of them.
Private equity is often opaque. Carlyle is listed on the
Field called Carlyle a “symbolic leader” in its field on climate issues. The company was technically fulfilling its responsibilities but displaying “slippery ethics,” he said, because while company officials talked about reducing emissions, the profitability of its fossil fuel investments was the bottom line.
Giant fund manager BlackRock made waves in the climate and finance world in early 2020 when its highly influential CEO,
Carlyle said that apart from companies it directly owns, it only publishes carbon emissions for those where it has the right to make operational decisions. The relationship with NGP, in contrast, is indirect, through an investment vehicle, a Carlyle spokesperson said. The spokesperson asked not to be named, in line with company policy.
“These are longstanding commercial arrangements negotiated with NGP,” the spokesperson said.
Carlyle publishes no emissions data for any individual companies so it is “illogical to suggest that we are leaving out NGP’s emissions,” the spokesperson said.
However, in 2020, Carlyle did publish emissions data for at least two of its companies, Accolade Wines and Neptune Energy. It owns 100% of Accolade Wines.
The spokesperson clarified that when its companies have published their own greenhouse gas footprints, Carlyle may highlight this.
The company also said that before the current high energy prices, NGP made up only 5-6% of its business. On climate change, the spokesperson said Carlyle was one of the first major private equity firms to commit to net zero emissions by 2050, and is a member of various environmental initiatives.
It if were to simply divest from all energy companies, that would make its decarbonization “someone else’s problem,” the spokesperson argued.
But for Baker, at the
“Given their massive fossil fuel exposure, private equity firms like Carlyle have an urgent responsibility to address the significant role they play in propelling the climate crisis,” said Baker.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission., source