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INTRODUCTORY
LETTER

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INTRODUCTORY
LETTER

We are pleased to share with you an interactive presentation that describes the impact of our work.

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2016

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OUR BOARD

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Next: PEOPLE
Next: PEOPLE

ENVIRONMENT

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ENVIRONMENT

See how we’re mobilizing capital toward sustainable economic development and environmental progress.

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ENVIRONMENT

Harnessing Financial
Solutions to Drive Environmental Outcomes

Goldman Sachs has a long-standing commitment to driving environmental progress. In 2016, we leveraged our people, capital and ideas to expand innovative clean energy solutions for our clients, helping them transition to a low carbon future. We also continued to make progress in the sustainability of our operations and the evaluation of potential environmental and social risk in transactions.

Innovations in green finance

Through our investing and financing teams, we helped facilitate several innovative green finance transactions, which will not only benefit the environment, but also drive job growth and strengthen local communities. These financial solutions help expand the investor base and drive more efficient capital to help address environmental challenges while achieving our central goal of serving our clients.

HARNESSING NATURE THROUGH FIRST-OF-ITS-KIND ENVIRONMENTAL IMPACT BOND

Our Urban Investment Group worked with the District of Columbia Water and Sewer Authority (“DC Water”) and Calvert Foundation in structuring and investing in the first-of-its-kind Environmental Impact Bond (EIB) issued by DC Water.

The EIB uses an innovative performance-linked structure to fund green infrastructure (e.g., permeable pavement, rain gardens) that harnesses nature in order to manage stormwater runoff, helping to reduce pollution in the District’s waterways while also stimulating local job creation.

INVESTING AND FINANCING RENEWABLES GROWTH IN INDIA

We have invested nearly $370 million in ReNew Power, helping establish the first dedicated renewable energy developer in India to surpass 1 gigawatt in commissioned wind and solar projects.

In recent months, we signed a new long-term power purchase agreement, which enabled ReNew to build a 50-megawatt solar power plant. Together with existing wind capacity, this will meet up to 70 percent of the energy needs of our Bengaluru campus.

We most recently served as joint global coordinator and book runner on ReNew’s $475 million green bond, leveraging an innovative structure to expand the company’s access to international investors. The bond provided ReNew with access to long-dated debt capital to refinance 500 megawatts of solar and wind projects across India.

EXPANDING THE MARKET FOR GREEN BONDS

We served as lead left book runner for Apple Inc.’s landmark $1.5 billion, seven-year green bond tranche, the first from a U.S. tech company and the largest by a U.S. corporate to date. Apple’s green bond helped demonstrate how businesses can help lead in driving environmental impact and won Environmental Finance’s corporate green bond of the year award for 2016. The proceeds from the offering are being used to fund renewable energy, energy efficiency and green materials projects.

TRANSFORMING A LEADING EUROPEAN UTILITY

We served as joint global coordinator and joint book runner on innogy SE’s $5.1 billion initial public offering, the largest IPO in Germany since 2000 and Europe’s largest IPO since 2011.

German utility RWE carved out innogy as a newly formed entity that is focused on developing renewable energy, modernizing the power grid that transmits power to customers, and selling electricity to customers. 

innogy’s core business areas are focused on utility segments that benefit from the secular trends of decarbonization, decentralization and digitization of the energy system.

Learn more about ways we are innovating to drive environmental progress across our businesses:

Sustainability of our operations: our progress toward 2020

We are focused on responsibly managing our operational impact, which is integral to a sound environmental policy and a necessary complement to our core business activities.

We have made significant progress on the environmental commitments set out in our updated 2015 Environmental Policy Framework. We have achieved carbon neutrality for our global operations and business travel through a mix of certified renewable energy credits and carbon offsets. In 2016, we procured certified renewable energy credits equivalent to 90 percent of our global electricity consumption, and we aim to procure 100 percent renewable power to meet our global electricity needs by 2020. We plan to achieve this goal by prioritizing the use of long-term power purchase agreements that facilitate the development of renewable energy resources, with the remainder through the procurement of certified renewable energy credits.

CATEGORY
2016 PROGRESS 2020 GOAL1
RENEWABLE ENERGY

Sourcing renewable power to meet our global electricity needs

90% 100%
ENERGY EFFICIENCY

Reducing absolute energy use across our operationally controlled facilities

10% 10%
GREEN BUILDINGS

Achieving LEED Gold or equivalent green building certifications

55% 70%
BUSINESS WASTE

Diverting business waste from landfill

91% 100%
PAPER

Reducing our consumption per capita

13% 20%
WATER

Reducing our absolute consumption in operationally controlled facilities

5% 5%
CERTIFIED MANAGEMENT SYSTEMS

Environmental Management Systems across our operationally controlled facilities

66% 100%
GREEN OPERATIONAL INVESTMENTS

Dedicated budget for investing in green buildings and innovative green technologies

$246M $2B

12020 goals are from a 2013 baseline except for our Green Operational Investments, which includes capital invested since 2015.

Learn more about how we manage our operational impact, and view our Environmental Performance Indicators here.

Environmental and social risk management

We approach the management of environmental and social risks with the same care and discipline as any other business risk.

Our advisory, financing and investing teams integrate environmental and social factors as part of their normal-course due diligence. Our Environmental Markets Group (EMG) further assists transaction teams by providing guidance, conducting independent reviews and, where relevant, identifying positive engagement opportunities with the potential client to reduce material environmental and social risk.

Learn more about our environmental and social risk management process and scope, as well as our due diligence guidelines.

TRANSACTIONS REVIEWED BY EMG IN 2016 BY SECTOR AND REGION
TRANSACTIONS REVIEWED BY EMG
IN 2016, BY SECTOR
818 TOTAL

TRANSACTIONS REVIEWED BY EMG
IN 2016, BY REGION
818 TOTAL

TRANSACTION CASE STUDIES
Declined transactions Transactions approved subject to environmental and social conditions
  • Industrial processing facility in a developing country
  • Hydropower in a developing country
  • Thermal power generation in a developing country
  • Mining project in a developed country

Learn more about these case studies.

Next: PEOPLE
Next: PEOPLE

How does
clean energy
help us grow?

The convergence of innovation
and economics is driving the
growth of clean tech
and related jobs.

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PEOPLE

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PEOPLE

See how we make significant investments in our most valuable asset — our people.

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OUR PARTNERSHIP WITH IFC

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THE BUSINESS CASE FOR CLIMATE ACTION

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GOVERNANCE

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GOVERNANCE

See how we remain responsible to our stakeholders and uphold the values that are at the core of our Business Principles.

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How does
difference
make the
difference?

Discourse about differences, inclusion and
commonalities enhances our firm.

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METRICS

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METRICS

View a selection of key performance indicators.

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EPF: 10-Year Milestones

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REBUILDING A COMMUNITY

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What big shifts
are emerging
now? What’s on
the horizon?

From China’s economy to shifting
patterns of investment, profound
changes are in the wind.

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RECOGNITION

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RECOGNITION

See our recent awards and achievements.

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OUR PEOPLE

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GS GIVES

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OUR PARTNERSHIP WITH IFC

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What is
powering the
ESG investing
surge?

New insights, research and
approaches to core investment
discipline.

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WHAT WE DO

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WHAT WE DO

Our commitment to creating a lasting impact

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ENGINEERING

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REVITALIZING COMMUNITIES THROUGH IMPACT INVESTING

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CHRISTINE LOH: ENVIRONMENTAL SUSTAINABILITY IN ASIA

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Where will
job growth
come from
next?

Boosting entrepreneurship is
critical, but so is rethinking work
in an age of surging automation.

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LEARNING PROGRAMS

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RESOURCES

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RESOURCES

View more ESG resources.

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THE NEW BOTTOM LINE - ESG INVESTING

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ESG & IMPACT INVESTING

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How can we
innovate to
deliver what
clients want
now?

Financial products that address their needs,
and are clear and simple to use.

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ENVIRONMENT

Harnessing Financial
Solutions to Drive Environmental Outcomes

Goldman Sachs has a long-standing commitment to driving environmental progress. In 2016, we leveraged our people, capital and ideas to expand innovative clean energy solutions for our clients, helping them transition to a low carbon future. We also continued to make progress in the sustainability of our operations and the evaluation of potential environmental and social risk in transactions.

Innovations in green finance

Through our investing and financing teams, we helped facilitate several innovative green finance transactions, which will not only benefit the environment, but also drive job growth and strengthen local communities. These financial solutions help expand the investor base and drive more efficient capital to help address environmental challenges while achieving our central goal of serving our clients.

HARNESSING NATURE THROUGH FIRST-OF-ITS-KIND ENVIRONMENTAL IMPACT BOND

Our Urban Investment Group worked with the District of Columbia Water and Sewer Authority (“DC Water”) and Calvert Foundation in structuring and investing in the first-of-its-kind Environmental Impact Bond (EIB) issued by DC Water.

The EIB uses an innovative performance-linked structure to fund green infrastructure (e.g., permeable pavement, rain gardens) that harnesses nature in order to manage stormwater runoff, helping to reduce pollution in the District’s waterways while also stimulating local job creation.

INVESTING AND FINANCING RENEWABLES GROWTH IN INDIA

We have invested nearly $370 million in ReNew Power, helping establish the first dedicated renewable energy developer in India to surpass 1 gigawatt in commissioned wind and solar projects.

In recent months, we signed a new long-term power purchase agreement, which enabled ReNew to build a 50-megawatt solar power plant. Together with existing wind capacity, this will meet up to 70 percent of the energy needs of our Bengaluru campus.

We most recently served as joint global coordinator and book runner on ReNew’s $475 million green bond, leveraging an innovative structure to expand the company’s access to international investors. The bond provided ReNew with access to long-dated debt capital to refinance 500 megawatts of solar and wind projects across India.

EXPANDING THE MARKET FOR GREEN BONDS

We served as lead left book runner for Apple Inc.’s landmark $1.5 billion, seven-year green bond tranche, the first from a U.S. tech company and the largest by a U.S. corporate to date. Apple’s green bond helped demonstrate how businesses can help lead in driving environmental impact and won Environmental Finance’s corporate green bond of the year award for 2016. The proceeds from the offering are being used to fund renewable energy, energy efficiency and green materials projects.

TRANSFORMING A LEADING EUROPEAN UTILITY

We served as joint global coordinator and joint book runner on innogy SE’s $5.1 billion initial public offering, the largest IPO in Germany since 2000 and Europe’s largest IPO since 2011.

German utility RWE carved out innogy as a newly formed entity that is focused on developing renewable energy, modernizing the power grid that transmits power to customers, and selling electricity to customers. 

innogy’s core business areas are focused on utility segments that benefit from the secular trends of decarbonization, decentralization and digitization of the energy system.

Learn more about ways we are innovating to drive environmental progress across our businesses:

Sustainability of our operations: our progress toward 2020

We are focused on responsibly managing our operational impact, which is integral to a sound environmental policy and a necessary complement to our core business activities.

We have made significant progress on the environmental commitments set out in our updated 2015 Environmental Policy Framework. We have achieved carbon neutrality for our global operations and business travel through a mix of certified renewable energy credits and carbon offsets. In 2016, we procured certified renewable energy credits equivalent to 90 percent of our global electricity consumption, and we aim to procure 100 percent renewable power to meet our global electricity needs by 2020. We plan to achieve this goal by prioritizing the use of long-term power purchase agreements that facilitate the development of renewable energy resources, with the remainder through the procurement of certified renewable energy credits.

CATEGORY
2016 PROGRESS 2020 GOAL1
RENEWABLE ENERGY

Sourcing renewable power to meet our global electricity needs

90% 100%
ENERGY EFFICIENCY

Reducing absolute energy use across our operationally controlled facilities

10% 10%
GREEN BUILDINGS

Achieving LEED Gold or equivalent green building certifications

55% 70%
BUSINESS WASTE

Diverting business waste from landfill

91% 100%
PAPER

Reducing our consumption per capita

13% 20%
WATER

Reducing our absolute consumption in operationally controlled facilities

5% 5%
CERTIFIED MANAGEMENT SYSTEMS

Environmental Management Systems across our operationally controlled facilities

66% 100%
GREEN OPERATIONAL INVESTMENTS

Dedicated budget for investing in green buildings and innovative green technologies

$246M $2B

12020 goals are from a 2013 baseline except for our Green Operational Investments, which includes capital invested since 2015.

Learn more about how we manage our operational impact, and view our Environmental Performance Indicators here.

Environmental and social risk management

We approach the management of environmental and social risks with the same care and discipline as any other business risk.

Our advisory, financing and investing teams integrate environmental and social factors as part of their normal-course due diligence. Our Environmental Markets Group (EMG) further assists transaction teams by providing guidance, conducting independent reviews and, where relevant, identifying positive engagement opportunities with the potential client to reduce material environmental and social risk.

Learn more about our environmental and social risk management process and scope, as well as our due diligence guidelines.

TRANSACTIONS REVIEWED BY EMG IN 2016 BY SECTOR AND REGION
TRANSACTIONS REVIEWED BY EMG
IN 2016, BY SECTOR
818 TOTAL

TRANSACTIONS REVIEWED BY EMG
IN 2016, BY REGION
818 TOTAL

TRANSACTION CASE STUDIES
Declined transactions Transactions approved subject to environmental and social conditions
  • Industrial processing facility in a developing country
  • Hydropower in a developing country
  • Thermal power generation in a developing country
  • Mining project in a developed country

Learn more about these case studies.

Next: PEOPLE
Next: PEOPLE