December 16, 2019 Read More →

Goldman Sachs tightens fossil fuel financing policies, pledges billions for ‘climate transition’

Bloomberg:

Goldman Sachs Group Inc. has tightened its policy on fossil fuel financing in a move welcomed by environmental groups, just as global talks on climate change faltered in Madrid over the weekend.

The Wall Street firm’s recently updated environmental policy framework includes pledges to decline financing that directly supports new thermal coal mines and upstream Arctic oil exploration and development. The company is targeting $750 billion for “climate transition and inclusive growth finance” over the next decade, according to its website.

An increasing number of global banks have been reducing their lending to the coal industry, a leading contributor to greenhouse gas emissions, and increasing financing for renewable energy.

The Rainforest Action Network and the Sierra Club said that the revisions on fossil fuel financing make Goldman’s policy “now the strongest among the big six U.S. banks,” while still behind those of European lenders including Credit Agricole SA and BNP Paribas SA. The move to rule out Arctic oil projects marks “a crucial first step, among U.S. banks, on ending financing expansion of oil and gas,” the groups said in a joint statement.

Chief Executive Officer David Solomon touted Goldman’s plans for more sustainable funding in an op-ed in the Financial Times. “Over the next 10 years, Goldman Sachs will target $750 billion of financing, investing and advisory activity to nine areas that focus on climate transition and inclusive growth,” he wrote. They include clean energy and transport, sustainable food and agriculture, and education.

Goldman’s new policy also included pledges to: decline financing projects of new coal-fired power plants in developing nations ‒ a commitment that previously only applied to the U.S. and developed countries ‒ unless they have carbon capture and storage or equivalent emissions reduction technology [and] engage with thermal coal mining companies on their plans to diversify away from the fossil fuel, and phase out financing for any that don’t have such strategies “within a reasonable timeframe.” 

[Russell Ward]

More: Goldman Sachs Curbs New Lending on Coal and Arctic Oil

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