In 2011, Goldman Sachs Asset Management (GSAM) becomes a signatory to the UN Principles for Responsible Investment (UNPRI), a global collaborative of investors established in 2006 in recognition of the increasing relevance of environmental, social and governance issues to the practice of investment management.

While early models of socially responsible investing (SRI) can be traced to the 1960s, the concept of considering the implications of environmental, social and governance (ESG) factors into investment decision-making only gained meaningful traction in the 1990s and early 2000s. In 2005, United Nations Secretary General Kofi Annan invited a group of the world’s largest institutional investors to join an effort to develop a common set of principles for responsible investment.

Answering the call, a 20-member institutional investor group from 12 countries, supported by 70 industry experts, developed guidelines aimed at better aligning investors with broader societal objectives. The UN Principles for Responsible Investing (UNPRI) were ceremonially launched at the New York Stock Exchange in April 2006, marking a significant milestone in the evolution of ESG investing. This set of six voluntary and aspirational investment principles offered a menu of possible actions for investors to incorporate ESG issues into their investment practice, including factoring ESG considerations into investment analysis and seeking appropriate disclosures on such issues by the entities in which they invest.

In December 2011, Goldman Sachs Asset Management (GSAM) became a signatory to the UNPRI. In doing so, the firm’s asset management arm committed to considering the investment implications of ESG issues within its portfolio management and investment decision-making process where appropriate and consistent with its fiduciary duty to clients.

In a Statement on Responsible and Sustainable Investing, GSAM outlined specifics regarding how it would help ensure that client investments were well governed and sustainable. Steps included the adoption of a global proxy voting policy that would incorporate the firm’s beliefs on key governance and ESG topics and the codification of team-specific approaches for the socially responsible management of fundamental equity and corporate credit.

Signing the UNPRI was just one example of Goldman Sachs’ leadership in issues of global corporate citizenship. Among others, the firm was one of the first financial institutions to acknowledge the scale and urgency of challenges posed by climate change when it established the Goldman Sachs Environmental Policy Framework in 2005. GSAM’s 2015 acquisition of Imprint Capital, a leading institutional impact investing firm and innovator in ESG and impact investing, further deepened the firm’s ability to deliver market-leading ESG and impact investment opportunities, advice and portfolio analytics.

 

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