GS SUSTAIN: ESG of the Future–Accelerating the Energy Transition: Metrics and Tools to Measure Progress

As Sustainability investing matures to the “Measurement” phase of its cycle and becomes more forward-looking, there is rising focus on how to quantify impact — whether environmental or social. On the environmental side, managements and investors are seeking greater clarity on how to prioritize metrics that can help evaluate climate transition progress. A successful energy transition warrants companies that provide solutions, innovation and ability to improve/decarbonize their own operations. To measure this, Goldman Sachs research analysts believe investors will look for the 3 P’s: Plan, Path, Performance — with a focus on Green Revenue, Green Capex, greenhouse gas emissions intensity, emissions avoidance and management accountability. They highlight their Climate Transition Tool that provides a framework for quantifying corporate climate transition performance and plan transparency as well as our forward-looking estimates for Green Revenue mix, Green Capex mix and greenhouse gas emissions.