Who would have thought that one of the world’s biggest and most powerful investment banks would start to shift their investment strategies towards the protection of the climate? Goldman Sachs just announced that they are planning to put a whopping $750 billion into future climate investment funds over the next ten years. As the climate is changing, so are the attitudes of the the big banks and Wall Street. Finally!
According to the bank’s announcement, there will be 9 key themes of sustainable finance growth:
Supports efforts to reduce emissions and environmental impact by investing in renewable energy and generation- and efficiency.
Supports shifts of mode of transit and per-trip efficiency through electric vehicles, autonomous driving and public transportation development.
Sustainable Food & Agriculture
Supports the improved sustainability of the food and agricultural value chain; from agricultural production to storage, processing and distribution to green consumer goods.
Waste & Materials
Supports responsible waste management and sustainable production and consumption operations.
Supports and monetizes the value of forests, water and biodiversity through contribution to the sustainable development of natural resources.
Accessible Innovative Healthcare
Supports the use of digital technology, coordination and infrastructure advancements, as well as advanced devices and diagnostics.
Supports the growth and advancement of financial technology, insurance products and alternative credit.
Accessible Affordable Education
Supports greater access to education, improved learning outcomes, and the closing of opportunity gaps for learners of all ages.
Supports community investment, infrastructure development, affordable housing and livelihood advancements.
A new era of global investments
For a conglomerate investment firm such as Goldman Sachs, this is a major transformation, indeed. They are literally on their way to go from extremely unsustainable risk capital and fossil fuel investments to long-term, highly sustainable climate investment funds and investments.
Related article: Europe’s New green Deal will End Fossil Fuel Investments by 2021
Regardless of Wall Street’s and Goldman Sachs’ past, these are new times and new opportunities and the big banks now have the chance to do really good work. And this work does not have to unequal financial gains and rewards, by no means! David M. Solomon, CEO at Goldman Sachs, hit the nail on the head is his statement “Our commercially driven plan for sustainability”, by explaining that:
“There is not only an urgent need to act, but also a powerful business and investing case to do so.” – David M. Solomon
Of course, no one can seriously demand that the enormously powerful and wealthy banking industry suddenly drops all their investments and growth! That can only be called wishful thinking. But the good news is that such drastic changes are not necessary at all!
The new climate economy
Public opinion and and debate has become extremely powerful during the last decade, partly with the help of social media. And while the voice of politics sometimes seems to become more silent and weaker, the voice of the people has become ever louder and more powerful. This public strength and awakening can eventually turn into a new era of governance. And the shift that right now is taking place in the financial world is part of what is referred to as the new climate economy.
This concept is written about by Finance & Development’s editor in chief Gita Bhatt. It includes an ever growing awareness and focus on climate change issues, sustainability and climate investment funds. Above all, the new climate economy targets concrete solutions that offer growth opportunities. These are supported by technological innovation, sustainable investments, and a dynamic private sector. In other words, it is a perfect description of green and sustainable capitalism. It simply goes without saying that there should be financial growth and incentives incorporated into this concept.
Climate change is real, and so is the growing environmental awareness within the business and financial sectors. Thus, this extraordinary focus shift and the will to perhaps transform an entire system must be celebrated and applauded, according to us at All Good Newz.
A new policy for investments and the environment
In addition, Goldman Sachs released an update of their environmental policy framework. In it, the company states that it will stop financial aid to coal mines- and plants on a global scale.
Furthermore, we found another highly positive point, which states that:
“We will decline any financing transaction that directly supports new upstream Arctic oil exploration or development.”
In conclusion, we are extremely proud and happy over these positive climate change news and hope that you, dear reader, feel the same way! If big banks and big money understand the urgency and need for change and balance, then we all can, can’t we?
Feature image by Qingbao Meng on Unsplash