New reports indicate fossil fuel companies are getting rid of their environmentally damaging assets under the guise of climate action by selling them to private equity firms. Unfortunately, such moves result in less transparency and oversight because investor updates prepared by private equity firms are subjective and not available to the public. The Biden administration is seeking to address the gap in disclosure requirements between public and private firms.
This is not the first time Big Oil and private equity have seemingly been joined at the hip. Before taking the reins at the American Petroleum Institute (API), Mike Sommers was president of the American Investment Council (AIC), the private equity industry’s primary advocacy operation.
“Once again, the American people are being misled by the oil and gas industry. Selling off environmentally toxic assets to unscrupulous private equity firms that operate in the shadows doesn’t make these oil and gas companies climate champions. They are just passing the buck and hoping no one notices,” said Kyle Herrig, president of Accountable.US. “Just like the American Petroleum Institute, these companies are attempting an image makeover — but the fact remains: they are not serious about tackling the climate crisis. They are just looking to turn another buck.”
According to Politico, ACI estimates that private equity has spent $154 billion on oil, gas, and coal, compared to only $41 billion on renewables since 2010.