Goldman Sachs to spend $750bn to fight climate change by 2030
The bank expects to benefit from loans, deals and arrangements that will focus on financing sustainable projects. Goldman Sachs Group Inc outlined plans on Monday to put money and advice towards projects that fight climate change or help financially disadvantaged people, with executives arguing it is not only the right thing to do but can also generate income. The Wall Street bank set a lofty-sounding target of $750bn. The figure is a mix of loans, underwriting, advisory services and investments related to projects Goldman expects to be involved with by 2030. It reflects the total size of loans, deals and other arrangements Goldman expects to perform as a bank or intermediary with companies and projects focused on renewable energy, sustainable transportation, affordable education and several other areas, the bank said. Goldman also implemented a formal ban on financing certain drilling and coal-related activities. The moves come as pressure from activists and some investors has ratcheted up globally on banks activities financing fossil fuels or other sectors that have come into the political crosshairs, such as gun makers. Banks have also faced more scrutiny over their role in increasing economic inequality by catering to wealthy customers while shunning people who need access to financial services to better their lives. Goldman catered almost exclusively to the elite until it was forced to rethink its business model in the aftermath of the 2007-2009 financial crisis. In recent years, management decided to launch a retail bank and has tried to spruce up Goldmans image among Main Street consumers. On a call with reporters, Goldman executives declined to break down specifics about the $750bn target in terms of revenue or the banks own exposure. They said it will be dependent on market forces, making it hard to predict. There is a powerful business and investing case for working with companies that are taking steps to address climate change and inclusive growth, Goldman Sachs Chief Executive David Solomon wrote in an editorial announcing the goal in the Financial Times. Goldmans moves, which also included ruling out any new loans for Arctic drilling or thermal coal mines, came just as the United Nations concluded a conference that failed to ramp up efforts to combat global warming. A recent example cited on Mondays call is a bond offering Goldman handled for Italian electricity company Enel earlier this year. Enel raised $1.5bn, linking the debt to its commitment to increase its renewable energy base by 25 percent before 2022.