Performance that matters — advancing our purpose through sustainability

Here's my message to our shareholders on the release of Goldman Sachs' 2021 Sustainability Report:

As a financial institution, we work hard every day to help our clients take on their biggest challenges. Their success is essential to our growth. And in 2021, as supply chain disruptions spread, geopolitical tensions rose, and inflation took off, we strengthened our focus on helping our clients achieve their sustainability objectives. 

Our focus may be straightforward, but the sustainability transition itself is complex. If the world is to achieve net zero emissions by 2050, financial institutions like ours will need to partner with clients to reimagine not just how they power their businesses, but also the entire energy ecosystem, ranging from long-duration storage to carbon capture technology. Our own Carbonomics research indicates that $56 trillion of investment in green infrastructure is needed to reach the goals of the Paris Agreement.

And in the near term, we won’t be able to rely on renewables alone. The current energy crisis has only underscored how important it is to maintain access to reliable and affordable energy, and to do so we will need to use all the tools at our disposal. At Goldman Sachs, we will continue providing support, capital, and advice to traditional energy producers both in the near team, as they supply energy, and in the long term, as they decarbonize their businesses.

Beyond targets and plans, clients need capital and tools to help them align their sustainability goals with their financial well-being, and as a trusted advisor, we are well positioned to provide them the commercial solutions they need, whether it’s an ESG-linked Transaction Banking account or a clean energy–themed ETF.

But commercial solutions on their own won’t solve everything. Not enough private capital will flow to green infrastructure projects unless public policy creates the right incentives. Our economists estimate that the energy sector will need an additional $1.5 trillion in capital expenditures per year by 2032 to ensure a smooth transition to a low-carbon economy, and the economic ramifications of the war in Ukraine have only added to the sense of urgency. For its part, the U.S. Congress could help by passing the Build Back Better Act’s energy provisions, which include support for greater investment in renewables, electric vehicles, methane restrictions and carbon capture tax credits.

It’s the very complexity of the challenge that demands a holistic approach, and what makes ours different is that we’ve integrated sustainability across our business, our operations, and our partnerships with the outside world.

One reason our clients turn to us is that we define sustainability broadly, treating climate transition and inclusive growth as two sides of the same coin. Building on our years of work promoting the economic empowerment of women, we’re continuing to make headway with our new initiative, One Million Black Women, and we have a wide range of offerings that advance progress in both climate transition and inclusive growth. For instance, our Asset Management business has invested in a company that is training and hiring unemployed union workers to make buildings more energy efficient and another company that is creating affordable housing options as well as building the world’s most sustainable high-rise apartment building. Every day we are supporting clients as they navigate climate transition and inclusive growth across their portfolios and investments.

There’s still a long way to go, but we’ve made good progress: Of our ten-year goal of $750 billion in sustainable finance activity, we’ve achieved approximately $300 billion so far, including $167 billion in climate transition, $50 billion in inclusive growth and the remainder in multiple themes.

Looking ahead, we expect client demand for sustainable solutions to continue to grow. Our clients know that building a more sustainable and inclusive economy is not only the right thing to do, it’s the smart thing to do, especially in a world that’s becoming more competitive.

And we’ll be there for them every step of the way. We are, after all, in the midst of a transition. And by taking action now, we can help our clients produce more reliable and affordable energy as well as build a more sustainable and inclusive economy for today’s generation and the next.