Environmental Market Opportunities

Green Bonds and Impact Investing

Through our investing and financing teams, Goldman Sachs has been at the forefront of developing market-based solutions to addressing environmental and social challenges. We have facilitated several “firsts” for the green bond market and have catalyzed innovative structures to raise capital for projects that benefit the environment and strengthen communities. 

Green Bonds

Green bonds are a fixed-income instrument where the capital raised is dedicated for programs that benefit the environment—for example, delivering clean water, promoting renewable energy sources or increasing efficiency. More recently, the market has further evolved to include social and sustainability bonds, with a similar structure to green bonds but targeted to social and sustainability projects like affordable housing and small business growth. In addition to acting as an underwriter, we are committed to developing innovative applications for these types of bonds. Examples of transactions we’ve worked on include:

Environmental Impact Bonds

Goldman Sachs has also been a pioneer in the deployment of “environmental impact bonds,” an innovative and emerging financial instrument that leverages private investment to support high-impact environmental programs, where repayment is correlated to specific performance outcomes. 

Some of the same principles that Goldman Sachs pioneered with “social impact bonds” were leveraged to address green opportunities, where the private and public sectors can partner to bring much needed capital to high impact, underserved opportunities. We invested in the first-ever Environmental Impact Bond:

Environmental Benefits for Underserved Communities

Goldman Sachs has had a long-standing commitment to investing in underserved communities with nearly $7 billion deployed in the U.S. since 2001. More broadly, we continue to look for ways to integrate environmental co-benefits across our impact investing initiatives. We believe that an important component of revitalizing communities includes investment in opportunities that bring both environmental and social benefits, whether that is through access to healthy foods, public transit or through integrating energy efficiency measures and access to renewables, given energy expenditures account for a significant portion of low to moderate income families’ budgets. Examples of prior impact transactions we have worked on include:



Case Study: Apple

In June 2017, we served as lead left bookrunner for Apple’s $1 billion second green bond and in February 2016, 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 bonds have helped demonstrate how businesses can help lead in driving environmental impact. The proceeds from the offerings are being used to fund renewable energy, energy efficiency and green materials projects. Apple’s inaugural green bond won Environmental Finance’s corporate green bond of the year award for 2016.

Case Study: MTR Corporation

In October 2016, we acted as joint lead manager and joint bookrunner for MTR Corporation’s $600 million green bond. This was one of the first green bond issuances from Hong Kong as well as the first green bond from a railway operator in Asia, furthering the development of Hong Kong as a regional green finance hub and the expansion of green bonds in the Greater China region.

Case Study: Council of Europe

In March 2018, Goldman Sachs acted as joint lead manager on Council of Europe’s €500mm second Social Inclusion Bond. This builds on our April 2017 role as joint lead manager on a €500mm 7-year Social Inclusion bond for Council of Europe (COE). The 2017 issuance was COE’s first ever Social Inclusion Bond, which will fund loans to eligible social related sectors including, social housing for low-income populations, education and vocational training and, support for micro, small and medium-sized enterprises (MSMEs) for the creation and preservation of jobs.

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In July 2017, Goldman Sachs served as joint bookrunner on a €750 million 30-year green bond for SNCF Réseau, the state-owned French railway operator. The financing was the longest term euro-denominated green bond ever issued. Earlier in 2017, Goldman Sachs served as joint bookrunner on a €1 billion green bond for SNCF Réseau. Proceeds were allocated to upgrading and expanding rail lines as well as protecting biodiversity.

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IFFIm raises funds for immunization programs disbursed by Gavi, the Vaccine Alliance, by issuing vaccine bonds in the capital markets and repaying these bonds with long-term donor pledges — offering a market-rate return while demonstrably saving lives. In 2017, Goldman Sachs helped bring to market a $300 million floating rate vaccine bond. This was IFFIm’s fourth access to the USD market in syndicated format. This is de facto the longest-standing social bond issuer — beginning before “social bonds” existed as a discrete concept. IFFIm was established in 2006, and Goldman Sachs led IFFIm’s inaugural bond, a $1 billion 5-year benchmark issuance.


In 2016, Goldman Sachs Urban Investment Group worked with the District of Columbia Water and Sewer Authority (“DC Water”) in structuring and investing in the first-of-its-kind Environmental Impact Bond (EIB) issued by DC Water. The EIB will fund green infrastructure (e.g., permeable pavement, rain gardens) that harnesses nature in order to alleviate stormwater runoff, helping to reduce pollution in the District’s waterways while also stimulating local job creation. The transaction utilized an innovative performance-linked structure, whereby the coupon payments will vary based on the level of success of the green infrastructure. Learn more.

In 2014, Goldman Sachs acted as lead bookrunner on DC Water’s $350 million green bond offering. The capital was raised to fund new infrastructure to address combined sewer overflow issues, helping to improve water quality, reduce flood, and restore the District of Columbia’s waterways. This was the first green bond with a 100-year maturity, which matched the life of the asset and spread financing costs across generations that will benefit from the project. It was also the first U.S. issuer to carry an independent opinion of the sustainability of the issuer and the project.


In 2015, Goldman Sachs provided $84 million in funding to the Housing Authority of the City of Newark (“NHA”) to finance energy efficiency improvements across its portfolio of 34 public housing communities with over 6,000 rental homes affecting 10,000 residents throughout the City of Newark. The project is a public-private partnership that uses an innovative financing technique where the cost of installing energy conservation equipment is paid for using the savings that result from reduced energy consumption in the future. It is largest of its kind for a public housing authority to date. It enables NHA to finance capital improvements that are integral to its mission of creating and maintaining livable, sustainable affordable housing communities without having to fund costs upfront.
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In four transactions between 2013 and 2015, Goldman Sachs secured $30 million in funding to finance the first two phases of a project to redevelop a 69,000 square foot industrial building located in Newark’s Ironbound neighborhood. The building’s first anchor tenant will be AeroFarms, an innovative firm that builds, owns, operates and leases state-of-the-art vertical farm systems for urban environments. The company’s award-winning, proprietary aeroponic and LED technologies will allow its urban farms to grow up to 22 crop turns per year, compared to three turns per year via conventional methods. The systems require no pesticides and use 95% less water than traditional farming methods.
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ReFresh Project turns a formerly vacant building – located at the intersection of several historic neighborhoods, including Tremé, Faubourg St. John and Mid-City – into a 60,000 square foot ‘fresh food hub,’ revitalizing an area that was previously known as a ‘food desert.’ This is a traditionally underserved area, with high poverty and unemployment rates.
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