Private-equity firms are under increasing pressure to be more transparent about their massive fossil-fuel holdings and the damage they’re causing to the environment.

“The industry is operating in the shadows,” said Alyssa Giachino, research and campaign director at the nonprofit Private Equity Stakeholder Project. “The remedy is transparency.”

Since 2010, Carlyle Group Inc., Warburg Pincus LLC and all of the other private-equity firms have collectively invested more than $1 trillion in energy companies, with the lion’s share going to oil, gas and coal, as well as “dirty assets” publicly traded companies have offloaded, according to PESP’s estimates.

Most private-equity managers aren’t tracked by financial regulators because private markets are exempt from most public disclosures, Giachino said. This lack of transparency deprives the public and investors of a true picture of the damage inflicted by private equity on the planet and human health, she said.

PESP, along with other environmental groups, are calling on private-equity firms to move away from fossil fuels and “be fossil free by 2030,” and that includes rapid reductions in methane and natural-gas emissions, Giachino said. “Ultimately, we are calling for full transparency because only private-equity firms know what’s in their portfolios,” she said.

“Almost all of the industry’s biggest firms have in different ways developed ESG policies to demonstrate that they take climate change seriously,” Giachino said. “But there’s no standardized reporting, so little of what they’re doing is quantifiable.”

So in addition to transparency, environmental activists are demanding the industry take steps to align with science-based climate targets to limit global warming, disclose their fossil-fuel exposure, emissions and impacts, and report their portfolio-wide plans to transition to clean energy.

Officials from Carlyle and Warburg Pincus, two of the world’s largest private-equity firms, say the industry has taken notice. But the industry also is sticking with fossil fuel.

Warburg Pincus said it includes climate issues as an important part of its environmental, social and governance strategy. “In our ongoing effort to be transparent,” the New York-based firm said in a statement, “we have included our estimated sector emissions profile in our publicly available ESG report.” The private equity firm also said it “strongly” believes in the energy transition, “as reflected in our recent investments in low-carbon opportunities.”

Megan Starr, Carlyle’s global head of impact, said private equity “is working hard to get better, more quantitative data on climate risks and opportunities.” Starr said such efforts are a “huge focus” of Carlyle’s “engagement with portfolio companies, and we devote significant resources to helping portfolio companies gather the data and calculate their carbon footprints.”

A deeper look shows Carlyle has controlling equity stakes in six oil and gas companies (though three say they have plans to achieve net-zero emissions by 2050). In all, Washington-based Carlyle has a stake in 14 fossil-fuel companies or assets.

For its majority-owned fossil-fuel companies, Carlyle has promised to have 75 percent of their Scope 1 and Scope 2 emissions covered by Paris-aligned climate goals by 2025. Companies including Varo (in which it has a majority holding), Neptune Energy and Cepsa SA (in which it has minority stakes) have set targets to achieve net-zero emissions by 2050 or sooner.

Neptune said it plans to store more carbon than it emits by 2030 by repurposing its existing upstream oil and gas infrastructure to sequester carbon.

“Our strategy is to stay invested and work with management teams to set targets and drive real change in our energy systems,” Starr said.

While Carlyle has no investments in coal, the firm owns stakes in natural gas power plants, which collectively emit about 10.1 million metric tons of carbon dioxide per year into the atmosphere. (Those emissions are equal to 1.3 million homes’ worth of annual energy use.)

Starr said natural gas is “a transition fuel” that will be required for the next several decades to provide electricity across the US. Carlyle, which pledged in February to bring greenhouse gas emissions across its its portfolio to net zero by 2050, continues to work with those fossil-fuel companies to lower carbon emissions, she said.