Harnessing the Markets to Address Climate Change

Published on27 JUL 2015

On July 27th, Goldman Sachs joined the “American Business Act on Climate Pledge” at the White House as one of the original 13 signatories, underscoring our long-standing commitment to harnessing innovative financial solutions and market mechanisms to help solve environmental challenges.

Being able to invest and help our clients scale up clean energy solutions… enables us to facilitate the transition to a low-carbon energy future.

- Kyung-Ah Park

Kyung-Ah Park
Head of the Environmental Markets Group, Executive Office, Goldman Sachs

In 2005, Goldman Sachs established our Environmental Policy Framework, which articulated our belief in the importance of a healthy environment as the foundation for a strong and sustainable economy as well as our commitment to developing market-based solutions to address climate change.  We have continued to build upon this commitment across each of our businesses.

In the video above, Kyung-Ah Park, head of the Environmental Markets Group at Goldman Sachs, describes the role financial institutions can play in both mitigating and managing risks relating to climate change and why addressing climate change is an economic and social imperative as well as an environmental necessity. To that end, we are proud to release the following climate pledge, which builds on our existing initiatives:

  • Goldman Sachs has had a long-standing commitment to harness markets and deploy capital to scale up clean energy technologies and facilitate the transition to a low carbon energy future. In 2012, we established a ten year goal to finance and invest $40 billion in clean energy globally. Less than four years into that goal, we have already mobilized $37 billion of capital for solar, wind, smart grid and other clean technologies. We expect to achieve the full goal next year and are expanding our existing target to $150 billion in capital deployment for the clean energy sector by 2025.
  • As part of this goal, we will play a catalytic role by facilitating financial innovations in clean energy. To this end, we will seek to devise investment structures that bring greater investor capital to underserved markets and facilitate more equitable and affordable access to clean energy. In addition, we will look for opportunities to bring greater capital efficiency to clean energy projects through yield oriented vehicles, securitization, green bonds and other financial mechanisms.
  • We will also harness financial mechanisms to help our clients strengthen their physical resiliency and more effectively manage risks relating to weather extremes. Since 2006, we have structured over $14 billion of weather-related catastrophe bonds. As part of our continuing efforts in providing risk management solutions, we will facilitate new models that can evaluate the financial benefits of increased investments in physical resiliency.
  • Goldman Sachs Asset Management (GSAM) is committed to responsible and sustainable investing in serving our clients' investment goals. Through GSAM, we will seek to expand our offerings of ESG-related investment products, including lower-carbon investment opportunities, to our asset management clients. For example, we offer our clients equity strategies that exclude fossil fuel heavy sub-industries and emphasize investments that score highly on a range of environmental and social metrics.
  • Recognizing the importance of reducing our own carbon footprint, we pledge to achieve carbon neutrality across our operations and business travel in 2015 and maintain it thereafter. We will also aim to use 100% renewable power to meet our global electricity needs by 2020. Finally, by 2020 we will strive to reduce absolute energy use across our occupied operationally-controlled facilities by at least 10% from a 2013 baseline.

For more information, please see FACT SHEET: White House Launches American Business Act on Climate Pledge and White House Announces Additional Commitments to the American Business Act on Climate Pledge