Global investment banking, securities and investment management firm Goldman Sachs announced a new series of portfolio emissions intensity goals, targeting reductions in finance emissions in three key carbon intensive sectors, namely oil and gas, power and auto manufacturing.
The new goals follow the announcement by Goldman Sachs earlier this year of a pledge to align its financing activities with a 2050 net zero pathway, and its decision in October to join the Net Zero Banking Alliance (NZBA), an industry coalition committed to align operational and attributable emissions from their portfolios with pathways to net-zero by 2050 or sooner.
The new interim goals were unveiled with the release of Goldman Sachs’ 2021 Task Force on Climate-Related Financial Disclosures (TCFD) Report. In the introduction to the report, Goldman Sachs Chairman and CEO David Solomon wrote:
“As a financial institution, we believe we can achieve the greatest impact in advancing the climate transition by partnering with our clients across our business. Whether it’s by developing new sustainability-linked financing solutions, offering world-class strategic advice, or co-investing alongside our clients in cutting-edge clean energy companies, we’re constantly innovating and expanding new commercial capabilities to help our clients accelerate their transition.”
According to the report, Goldman Sachs chose the oil and gas, power and auto manufacturing sectors for its initial interim goals due to their materiality to global emissions and to the bank’s own business, and based on the availability of data for meaningful client engagement. Combined, the sectors account for 38% of Goldman Sachs’ portfolio of carbon intensive sector activities, and around 9% of the overall portfolio.
The new goals include targets to reduce portfolio emission intensity by 17% – 22% for the oil and gas sector, 48% – 65% for power, and 49% – 54% for auto manufacturing. According to the bank, the lower bounds of each target are aligned with net zero pathways, and each of the proposed target ranges are aligned with the goals of the Paris Agreement to limit the increase in global average temperature to well below 2°C. Goldman Sachs stated that it will announce targets for the majority of the remaining carbon-intensive sectors in line with NZBA guidelines by Q4 2024.