In November 2005, Goldman Sachs established its Environmental Policy Framework, articulating the firm’s conviction that a healthy environment is a prerequisite for a strong economy and a sustainable future, and its belief that markets can and should play an important role in addressing environmental challenges. At that time, Goldman Sachs was one of the first financial institutions to acknowledge the impact of climate change on issues including economic development, poverty alleviation, access to clean water, food security and adequate energy supplies.

Reflective of that is the firm’s commitment to environmental sustainability, which encompasses each of its businesses, whether it is deploying capital to expand clean energy solutions, underwriting innovative green bonds or structuring catastrophe-linked securities to help clients manage climate change risks. As of 2019, Goldman Sachs had mobilized more than US$100 billion in clean energy financing and investments, with a target to deploy US$150 billion by 2025.

In recent years, inclusive economic growth and climate transition have emerged as growing areas of focus for investors, shareholders and the world at large. The environmental, social and governance (ESG) and impact assets under supervision in the firm’s Consumer and Investment Management Division (CIMD) have grown from US$550 million in 2015 to US$35 billion in 2019.

Goldman Sachs established a carbon emissions trading desk following the 2005 launch of the European Union Emissions Trading Scheme — the first and largest greenhouse gas emissions trading platform in the world.

Since the launch of the Environmental Policy Framework, Goldman Sachs has also progressed with initiatives across its operations, with more than US$4.5 billion in green investments to reduce its own impact on the environment. As of 2015, the firm had achieved carbon neutrality (zero net carbon emissions) across its global operations and business travel. Key goals for 2020 included 100 percent renewable power for the firm’s global electricity needs, zero business waste to landfill and green building certification for 70 percent of Goldman Sachs’ real estate worldwide.

In 2006, the firm also launched the Goldman Sachs Center for Environmental Markets to undertake partnerships with corporations, academic institutions and non-governmental organizations. Since then, the firm has established numerous partnerships that have facilitated independent research, the development of new environmental tools, and high-level gatherings that have informed climate policy, valuation of forest ecosystems, energy and resource efficiency, renewables in underserved markets, and water risk.

Goldman Sachs views sustainability as core to its mission and continues to progress in its commitments to becoming a more sustainable company. For Goldman Sachs, fostering more-inclusive growth and addressing climate change represent both commercial opportunities and competitive necessities. In response, in 2019 it formed the Sustainable Finance Group (SFG), which partners with the firm’s businesses to drive innovation and capture sustainability opportunities using a holistic, integrated approach. The group is embedded in all areas of the business, providing clients with the most comprehensive sustainability expertise across financing, advisory, risk management, asset management and risk management.

 

This article was originally published as part of a series commemorating the 150th anniversary of Goldman Sachs' founding in 1869.