Leading global investment banking, securities and investment management firm Goldman Sachs announced the issuance of its first Sustainability Bond, in an $800 million offering, with proceeds to be allocated towards projects and initiatives aimed at accelerating the climate transition and advancing inclusive growth.
David Solomon, Chairman and Chief Executive at Goldman Sachs, said:
“The launch of our first sustainability bond shows that investors can drive innovative solutions by using our firm’s extensive platform and resources. We’ve said building a low-carbon, inclusive economy is a business imperative, and now we’re demonstrating our commitment by using the same financial toolkit we recommend to our clients.”
Sustainability bonds are one of the fastest growing categories of the sustainable finance market, with funds that are earmarked to finance combinations of eligible green and social projects.
Goldman Sachs issued the new bonds under its Sustainable Issuance Framework, which outlines the eligible categories for allocating funds raised through the issuance for sustainability securities. The firm’s framework specifies five eligible green categories, and four social categories. These include:
- Eligible green project categories: Clean Energy, Sustainable Transport, Sustainable Food & Agriculture, Waste and Materials, and Ecosystem Services.
- Eligible social project categories: Accessible and Innovative Healthcare, Financial Inclusion, Accessible and Affordable Education, and Communities.
According to the framework, the eligible categories chosen mirror those focused on by Goldman Sachs finance commitment to deploy $750 billion of financing, investment and advisory services over the next ten years.
Dina Powell McCormick, Global Head of Sustainability and Inclusive Growth at Goldman Sachs, said:
“We are committed to executing on our $750 billion target across investing, financing and advisory activities by 2030. The proceeds from our sustainability bond will advance our focus on climate transition and inclusive growth.”
According to Deputy Treasurer Carey Halio, Deputy Treasurer, Goldman Sachs tapped a network of diverse and miniority-led dealers to complete the deal. Halio said:
“Goldman Sachs was the lead book runner with a syndicate otherwise comprised entirely of diverse and minority led broker dealers. The 5-year bond, which is callable in 4-years, will pay interest semi-annually at a fixed rate of 0.855% for the first four years, and then quarterly at a floating rate of SOFR+0.609% in the final year, if not called.”