- Goldman Sachs is earmarking $750 billion for investments in sustainable projects over the next 10 years. These are the details.
In a recent op-ed for Financial Times, Goldman Sachs Chairman & Chief Executive Officer David M. Solomon wrote that the financial giant is earmarking $750 billion of financing, investing, and advisory activity over the next 10 years to nine areas focused on climate transition and inclusive growth.
The nine areas include clean energy and transport, sustainable food, affordable education, financial inclusion, and other areas largely defined by the company’s objectives with measurable results.
“Our economy faces two defining challenges. If business in partnership with government cannot adapt the global economy to avoid the worst impacts of climate change and generate inclusive growth that lifts people out of poverty and expands the middle class, the negative consequences will be vast,” wrote Solomon.
In the areas of sustainable transport, Solomon said that the company will invest and finance projects that shift the mode of transport or increase per-trip efficiency for reducing fossil fuel consumption and environmental impacts. And investments in affordable education will increase graduation rates, job placement rates and training hours.
Goldman Sachs managing director John Goldstein is also overseeing the initiative as the head of the sustainable finance group at the company. Goldstein told CNBC that the company is already involved in the nine areas, but the $750 billion budget gives the sustainability initiative more recognition. And it signals to clients that it is a top priority at the financial firm:
Goldman Sachs also revamped its environmental policy framework to include stricter fossil fuel lending policies. Plus the company will no longer finance any new drilling projects in the Arctic.
This type of initiative is also known as ESG investing, which is an emphasis on environmental, social and governance. According to the Global Sustainable Investment Alliance, the total assets under management for ESG stood at $30.7 trillion at the start of 2018.
