Our Business Initiatives
In 2012, we extended our longstanding commitment to clean energy by establishing a $40 billion target to finance and invest in companies that promote clean technology alternatives over the next decade. Despite a challenging global market environment that was particularly difficult for clean energy, we continued to identify opportunities to meet this goal. In 2012, we financed nearly $2 billion and co-invested more than $430 million in the sector. We served as financial advisor on clean energy transactions valued at more than $1.1 billion. Since 2006, we have financed more than $26 billion and co-invested more than $4.3 billion toward clean technology companies globally. Recent transactions include the following examples.
In December 2012, we were the lead underwriter on SolarCity’s initial public offering, helping to raise $106 million. The initial public offering was the first for a distributed solar generation company and the first renewable energy company initial public offering in six months. Earlier in the year, we provided financing to the company to help fund the purchase of inventory. SolarCity has expanded to serve more than 50,000 customers in 14 states, including more than 300 schools and government agencies, as well as all four branches of the U.S. military.
In July 2012, the firm helped raise $98 million in debt financing for Citizens Energy Corporation to purchase a 30-year, 50 percent leasehold interest in a portion of a high-voltage transmission line. The line is being built by San Diego Gas & Electric and will link clean energy sources in Imperial Valley to load centers in San Diego and reduce transmission congestion. Citizens has committed to use 50 percent of its profits to assist with the energy needs of low-income and senior homes in the region, and has begun a program to install rooftop solar panels on homes to reduce electric bills by up to 50 percent.
Advanced biofuels and feedstock
We served as lead underwriter on the $75 million initial public offering for Ceres in early 2012. The company develops next-generation seeds for the production of high-yielding, dedicated energy crops that can enable large-scale sustainable feedstock for biofuel producers. Proceeds from the transaction are being used to grow the business via further commercialization of existing products, support increased sales and marketing and fund next-generation research and development.
In September 2012, we were the sole manager in the $225 million follow-on equity offering for Tesla Motors, the Palo Alto, California, manufacturer of high-performance fully electric vehicles and advanced electric vehicle powertrain components. This was the second capital markets transaction we led for the company since advising on its initial public offering in 2010. Strong demand from investors led to a significant oversubscription for the offering, demonstrating the broad interest from both new and existing investors in the electric vehicle sector.
Extreme weather, inadequate water infrastructure systems and growing demand have made water needs more acute. While increasingly constrained government funding has made meeting the infrastructure needs challenging, we are committed to helping communities meet their capital needs to address these challenges. For example, last November, the firm helped finance an innovative public-private partnership between the city of Rialto, Table Rock Capital, Union Labor Life Insurance Company and Veolia Water on a 30-year concession to manage Rialto’s water and wastewater systems. A portion of the proceeds will be used to upgrade the water systems, reduce water loss from leakage and improve operations.
We develop and place catastrophe-linked securities that help our clients mitigate financial risk, including from extreme weather events. For example, in April 2012, we helped Citizens Property Insurance Corporation, a state-owned insurer of last resort for Florida homeowners, transfer $750 million in risk of loss from hurricanes to capital market investors in the form of a catastrophe risk-linked security known as Everglades Re. The firm has placed several such weather risk-linked transactions and was recognized by Environmental Finance as the "Best Dealer in Catastrophe Risk Management" in 2012.
Our GS SUSTAIN research team continues to expand its analysis of companies, further helping clients identify environmental, social and governance outperformers and structural leaders. In May 2012, GS SUSTAIN announced a major expansion of its analysis to nearly 1,400 mid-to-large-sized companies globally, following the collection and analysis of nearly 100,000 ESG data points from publicly available sources. From its inception in June 2007 through the end of 2012, the GS SUSTAIN Focus List has outperformed the MSCI All Country World Index (ACWI) global equity benchmark by more than 40 percent.
Goldman Sachs Asset Management
Goldman Sachs Asset Management (GSAM) is committed to responsible and sustainable investing and the formal integration of environmental, social and governance principles into investment strategies and client solutions across our investment platform globally, where applicable. The foundation of our approach to responsible and sustainable investing is built on our core philosophy of serving our clients’ investment goals and adhering strictly to our fiduciary duty as an asset manager. At GSAM, we believe responsible and sustainable investing extends beyond the evaluation of quantitative factors and traditional fundamental analysis. Where material, it should include the analysis of an entity’s impact on its stakeholders, the environment and society. We recognize that these ESG factors can affect investment performance, expose potential investment risks, and provide an indication of management excellence and leadership.
Please see our GSAM Citizenship website and read our GSAM Statement on Responsible and Sustainable Investing for further information.
Environmental Risk Management
We approach the management of environmental and social risks with the same care and discipline as any other business risk. As part of this commitment, we believe it is important to take the environmental and social impacts and practices of our clients and potential clients into consideration as we make business selection decisions. Our Environmental Markets Group assists business teams by providing guidance on environmental matters, doing independent reviews as appropriate and identifying mitigants and positive engagement opportunities with clients to reduce risk. In 2012, 262 transactions were reviewed by the Environmental Markets Group and 526 new employees received environmental, social and governance training. For more information, please see our Business Selection and Environmental Advisory process.