This week, Goldman Sachs joined more than a dozen of the world’s largest banks in announcing policy changes to help human sustainability, including that it will no longer finance new oil projects in the Arctic where President Donald Trump and others have sought to expand development.
In short, Goldman has acknowledged that destroying the ecosystem, on which we all depend, is bad for business.
CEO David Solomon explained in a Financial Times oped here and urged governments of all levels to price carbon and help channel capital to low carbon solutions and innovation without further delay. Combining public policy, technology and capital is a must, not a choice he wrote:
Our economy faces two defining challenges. If business in partnership with government cannot adapt the global economy to avoid the worst impacts of climate change and generate inclusive growth that lifts people out of poverty and expands the middle class, the negative consequences will be vast.
Companies have traditionally treated sustainability as a peripheral issue, focusing narrowly on the way they manage their impact on the environment. We don’t have the luxury of that limited perspective any more. The evidence of climate change is clear. And, people in both developed and developing countries are questioning the ability of their economies to reward their hard work.
There is not only an urgent need to act, but also a powerful business and investing case to do so. That gives me hope for what we can achieve and conviction that financial institutions can play a critical role. Over the next 10 years, Goldman Sachs will target $750bn of financing, investing and advisory activity to nine areas that focus on climate transition and inclusive growth.
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