Dec 3, 2019 - Energy & Climate

Climate change expected to drive private equity away from fossil fuels

Dan Primack

illustration of an oil barrel with a plant growing out of it — Illustration: Aïda Amer/Axios

Concerns over climate change will reduce the amount of capital available for private equity investments in fossil fuels, according to a recent survey by Coller Capital.

By the numbers: 38% of responding limited partners say they will reduce their commitments to oil and gas funds over the next five years.

The numbers are much higher among European and Asia-Pacific LPs than for those in North America, where only 30% say climate change will cause any change to their PE investment strategy and just 16% say it will affect their own operating procedures.

Many of the respondents are planning to replace fossil fuel dollars with investments in renewable energy. If that comes to pass, it could significantly increase private equity's influence in the sector, where overall global investment is down from its 2016 peak.

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Climate change expected to drive private equity away from fossil fuels

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