ESG and Impact Investing Leverage Capital for Sustainability
Sustainability is a key driver of how Goldman Sachs engages with clients and the industry more broadly. By 2019, the firm’s commitment to sustainability is closely integrated across the firm’s activities – whether through raising capital to support sustainable business models, offering powerful environmental, social and governance (ESG) investment solutions, or effectively managing the environmental and social risks of its own operations.
Goldman Sachs has a long history of deploying its expertise and position in the capital markets to help address issues that impact society and the environment. The firm released its Environmental Policy Framework in 2005, becoming one of the first global financial institutions to underscore the urgency to address climate change. Since then, Goldman Sachs has harnessed its core capabilities to drive progress, as reflected in its broad-based environmental, social and governance (ESG) and impact investing initiatives.
As of 2019, the firm had mobilized more than $100 billion in clean energy financing and investments, with a target to deploy $150 billion by 2025, while also investing in entrepreneurs through its 10,000 Women, Launch With GS and 10,000 Small Businesses programs. Through its Urban Investment Group (UIG), Goldman Sachs commits capital to underserved US communities. The firm has underwritten over $4.5 billion in green, social and sustainability bonds and has led some of the most innovative transactions in this space. Goldman Sachs’ sustainability efforts extend to the management of the firm itself, driving efficiency efforts in its operations around the world. The firm achieved carbon neutrality (zero net carbon emissions) across its global operations and business travel in 2015 and planned to use 100% renewable power for its global electricity needs by 2020.
As inclusive economic growth and climate transition have emerged as growing areas of focus for investors, shareholders and the world at large, this has been reflected in the sustained growth in ESG and impact assets under supervision — from $550 million in 2015 to $35 billion in 2019 – in the firm’s Consumer and Investment Management Division (CIMD).
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, asset management and risk management.
Goldman Sachs has been recognized repeatedly for its long-standing commitment to sustainable finance. In 2019, the firm was named Best Bank for Sustainable Finance in North America by Euromoney for bringing innovation to social and environmental finance. Goldman Sachs Asset Management also received an A+ score on its overall ESG strategy for the fourth consecutive year in 2019 from the United Nations-supported Principles for Responsible Investment (PRI) annual assessment, earning an A or A+ score across all categories.