In what could be an important moment in the fight against climate change, Blackstone, a leading investment firm, may be moving away from the fossil fuel industry, though not to make any moral or ethical statement. Instead, as reported this week by Bloomberg, the company is concerned about the long term in oil and gas extraction and related industries. Up to now, Blackstone has been a big player in natural gas exports, offshore oil production, new pipelines, and fracking, each of which carry high environmental costs. Blackstone’s cooling on oil and gas could be significant; a recent study found that about 80 percent of the energy holdings of the top 10 private equity firms were in oil, gas, and coal. In the past year or two, that may be shifting to a new interest in renewable energy, according to a trade group. This could be good news as the global community struggles to mitigate the ongoing effects of industrialization.
Much of this happens behind a veil, frustrating efforts to know just how much the investment firms actually follow through on their pro-environment pledges. Interesting to note, Stephen Schwarzman, Blackstone’s founder and chief executive officer, has owned a house near Georgica Pond in East Hampton Village and now enjoys a fantastic view of Mecox Bay from his new place in Water Mill. Last year, Blackstone was criticized for its role in funding an oil terminal on a site in Louisiana that contained a 19th-century cemetery for enslaved people and that would interfere with a $2 billion effort to restore storm-buffering wetlands in Barataria Bay.
As public distaste for the fossil fuel industry has grown over the past decade, investment funding has shifted to private equity, which can operate more in the shadows. Climate change activists have called for greater transparency into where these firms put their money, as well as regulatory changes to make such disclosures mandatory, especially among companies that handle billions in public pension funds. But the climate crisis is exposing the funds to mounting risks, which, as with Blackstone, could shift interest to clean-energy investing. Poor returns may be the reason for the shift, but we’ll take any movement away from polluting industries.