Three months after the Trump administration announced plans to open the Arctic National Wildlife Refuge to oil and gas drilling, Goldman Sachs has pledged it will not finance drilling in the Arctic nor invest in new thermal coal mines anywhere in the world.
In addition, the firm has committed to invest or finance $750 billion over the next 10 years dedicated to two broad themes of “climate transition and inclusive growth,” and nine separate themes within those two categories, including clean energy and transport, sustainable food and agriculture and affordable education.
“Companies have traditionally treated sustainability as a peripheral issue, focusing narrowly on the way they manage their impact on the environment,” wrote Goldman Sachs CEO David Solomon in the Financial Times on Sunday. “We don’t have the luxury of that limited perspective any more. There is not only an urgent need to act, but also a powerful business and investing case to do so.”
Goldman is not renouncing all financing for fossil fuel based projects, which Solomon notes will continue to be produced, but pledging its support for clients as they reduce their carbon emissions and become more sustainable in the production, and in customers’ use, of their products.
“The markets can and will do much to address climate change, but given the magnitude and urgency of the challenge, that will not be enough,” writes Solomon. “In most places, there is no pricing mechanism to capture the cost of greenhouse gas emissions to society.”
Solomon called on governments to put a price on carbon through a cap and trade system, a carbon tax or other means. “Combining public policy, technology and capital is a must, not a choice.”