• Estimated emissions over 6,500 times higher than KKR reported to investors
• Continued investment in Liquefied Natural Gas (LNG)raises alarm over stranded asset risk
• Overview of KKR’s dirty secret https://peclimaterisks.org/kkr-greenwashing

Source: Kohlberg Kravis Roberts & Co. (KKR) has become a significant energy finance company with more than half a trillion dollars ($553 billion) in assets under management. However, because of regulatory gaps, the company is not obligated to reveal the full extent of its investments or their effects. According to the report 93 Million: The Carbon Emissions KKR Didn’t Disclose, by the Americans for Financial Reform Education Fund and Global Energy Monitor, KKR owns investments in 188 fossil fuel assets across 21 countries, which are distributed among its ownership of 17 portfolio companies.

Specifically, Crescent Energy, Sempra Infrastructure, and participation in six “carbon bomb”-related projects in the Barnett/Permian/Eagle Ford basins (U.S.), Duvernay/Montney basins (Canada), and Maritsa coal mine (Bulgaria) are examples of these investment portfolios.

The report also calculates KKR’s global carbon footprint, estimating that its fossil fuel investments in 2023 contributed to over 93 million metric tons of CO2 equivalent emissions, which is roughly 6,500 times the amount KKR disclosed to investors in its most recent Sustainability Report and comparable to the emissions from Wisconsin or Tennessee’s energy production.

“KKR’s behavior is a classic example of greenwashing. Outwardly, KKR portrays itself as a climate-friendly business but our research finds that KKR is doing the exact opposite,” said Dustin Duong, research associate at Americans for Financial Reform Education Fund. “KKR actively pursues and pours money into fossil fuel assets, and fails to disclose the full emissions footprint of its portfolio. KKR will be allowed to keep obscuring the true impact of their activities on investors and the public if regulators and Congress choose to overlook this ballooning risk and cease to take any meaningful action on disclosures.”

KKR is actively funding polluting projects and the creation of new fossil infrastructure, despite clear scientific evidence and global agreements pointing to the need to phase out fossil fuels,” said Alyssa Moore, researcher at Global Energy Monitor. “KKR should publish a full and transparent accounting of their financed emissions so that investors and community stakeholders can have the whole picture.”

From the extraction of oil to the burning of natural gas, KKR’s fossil fuel portfolio covers a wide range of fossil fuel industry sectors and supply chain phases. Both energy-specific funds and mixed infrastructure funds, like the KKR Global Infrastructure Investors IV fund, which is how KKR invested in Port Arthur LNG, are used for a large portion of its acquisitions. The actual magnitude of its climate risk is obscured by all of this.

The ownership of the Cameron LNG terminal in Louisiana, the Energia Costa Azul terminal in Mexico, and the Port Arthur terminal, which is currently under construction in Texas, further demonstrates KKR’s significant involvement in LNG terminals, according to the report. According to recent research, the expansion of LNG export facilities is seriously harming environmental and climate goals, with greenhouse gas emissions in the best-case scenario being 24% worse than coal. This is despite KKR’s description of LNG as a “reliable and cleaner energy during the global energy transition.”

“KKR’s investments in the U.S. LNG export industry not only produce tremendous greenhouse gas emissions but also come with community harms the firm is culpable for,” said Nichole Heil, research and campaign coordinator at Private Equity Stakeholder Project. “Continued investments in LNG are not aligned with greenhouse reduction goals and expose institutional investors to long-term financial risks associated with such a precarious industry.”

The private equity firm has recently come under fire for its active involvement in several fossil fuel projects that have a track record of causing harm to the community, including the Coastal GasLink Pipeline and the Colonial Pipeline. Citing a previous Private Equity Climate Risks consortium report, the Chicago Teachers Pension Fund rejected a new investment in KKR in April, pointing to the company’s dismal environmental justice and climate record.

“The truth is now out there: KKR lies about its carbon emissions,” said Chief Na’Moks, a hereditary chief of the Wet’suwet’en Nation, where a KKR-backed company is constructing Coastal GasLink on unceded Indigenous sovereign land. “The fact that their emissions are actually 6,500 times higher than what they report is absolute greenwashing. Anyone with a conscience will distance themselves from KKR.”

“KKR’s funding of fossil fuel projects in the Gulf South cannot be ignored any longer,” said Roishetta Ozane, an activist and director of the Vessel Project of Louisiana. “This report has exposed KKR’s shocking climate emissions, which are poisoning our air and water and making our children sick. It is disheartening to see a company that claims to prioritize sustainability engaging in such harmful practices. We urge KKR to take responsibility and immediately halt its investments in fossil fuels.”

“As banks and other financial institutions face pressure to exit the dying fossil fuel industry, private equity firms like KKR are swooping in, funneling billions of dollars towards oil and gas projects that destroy communities worldwide and put us all at risk,” said Melanie Kruvelis, senior climate finance organizer at Strong Economy for All. “KKR’s investors, including workers’ pension funds and university endowments, must pressure KKR to end its fossil fuel financing, and stop killing us all for profit.”

There are many private equity firms that continue to invest in oil and gas. At least $1.1 trillion has been invested globally in oil and gas exploration, extraction, pipelines, and power plants by private equity firms since 2010. Private equity firms frequently use tactics such as heavily indebting portfolio companies and enacting drastic cost-cutting measures, which push these businesses to take unwarranted risks in an effort to increase profits quickly. When funds intended for capital improvements, upkeep, environmental protection, asset retirement and remediation, or decarbonization are diverted to Wall Street investors, these businesses then find it difficult to function.

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The Private Equity Climate Risks consortium’s mission is to investigate private equity’s impact on the climate crisis. Members include Americans for Financial Reform Education Fund (AFREF), Global Energy Monitor (GEM), and the Private Equity Stakeholder Project (PESP). Read more and download past reports at: https://www.peclimaterisks.org.

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 http://www.ourfinancialsecurity.org 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 http://www.globalenergymonitor.org and on Twitter @GlobalEnergyMon.