USA: Goldman Sachs Launches Sustainable Investment Group

Jul 2019
USA, July, 29 2019 - Goldman Sachs last week announced establishment of the Sustainable Finance Group in an effort to push investors, bankers and insurers to act on climate change.

The initiative marks one more way environmental, social and governance (ESG) investment is going mainstream, said Bruno Sarda, president of CDP North America, formerly known as the Carbon Disclosure Project.

According to Goldman Sachs, "This group will be responsible for partnering with our businesses to better serve our clients, drive innovation and capture emerging opportunities as sustainable growth becomes more top of mind for investors, institutions and companies around the world."

"The creation of the new Sustainable Finance Group at Goldman is what shifting capital looks like," Sarda said, adding that the announcement is a "leading indicator" that other Wall Street players aren't far behind.

Sarda said the group will likely facilitate a concerted effort to narrow in on environmental opportunities all across Goldman Sachs' services and businesses. In 2019, CDP found there are $2 trillion in potential gains for companies that engage with sustainable finance, and Goldman's new group has potential to mobilize capital after those opportunities, Sarda said.

John Goldstein, who co-founded sustainable investing firm Imprint Capital, will lead the group, and Kyung-Ah Park, Goldman Sachs' head of environmental markets, will also support its work. Kara Succoso Mangone, who works in global investor relations, will serve as chief operating officer of the effort.

The initiative will build on Goldman Sachs' existing sustainable finance efforts. Just last month, the banker and CDP jointly launched two funds that use CDP metrics to drive sustainable investment strategies. The indexes were created by Euronext and contain only companies and stocks that perform well on climate change, water security and deforestation.

Goldman Sachs will develop more specific goals for the group in the months to come, the banker said in a statement.

But the details of those goals will be important to follow, said Casey Harrell, a senior campaigner with the Sunrise Project. While mounting sustainable finance efforts generally dedicate considerable energy to investing in companies that drive sustainable business practices, it's equally necessary to "screen out" high-carbon companies, including those in coal mining and oil sands, Harrell said.

According to the Rainforest Action Network's 2019 fossil fuel finance report card, Goldman Sachs placed last among 12 banking giants that together accounted for 37% of global fossil fuels financing since 2016, when the Paris Agreement was adopted. Harrell said "the devil will be in the details," and it will be necessary to see whether the group focuses on both impact investment and divestment.

"When assessing initiatives like this, we look to see company policies as it relates to coal, coal power, and subsectors of the oil and gas economy," Harrell said.

Source : E&E News

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