Private Equity Firms Turn to Climate Experts Amid Rising Risks

By Adrian Cole

Private equity firms are increasingly turning to climate experts and specialized tools to better understand and mitigate the risks posed by extreme weather events, according to a recent report by Bloomberg Green. This trend highlights a significant shift in investment strategies as traditional models, which rely on historical stability, are being reevaluated in the face of escalating climate threats.

SLR Consulting, for example, has expanded its Finance Advisory services in the EMEA region by acquiring Planetrics, a climate-modeling firm. This acquisition aims to enhance SLR's ability to quantify climate risks and opportunities for financial institutions, including private equity clients.

According to KPMG's 2026 CEO Outlook for asset management and private equity, only 28% of respondents currently integrate sustainability costs and values into capital decisions. However, nearly 75% plan to leverage artificial intelligence to improve climate risk modeling and scenario planning, particularly during due diligence on infrastructure and energy assets.

Despite these efforts, a recent update from the Private Equity Climate Risks Scorecard indicates that many firms still maintain significant exposure to fossil fuels. Among the 20 tracked firms, eight increased their fossil fuel investments over the past year. Notably, BlackRock's fossil fuel holdings now constitute nearly 50% of its energy portfolio, while firms like Quantum Capital Group and Warburg Pincus continue to have over 90% of their investments in fossil fuels.