Goldman-Sachs: Limit High Carbon Financing
WHEREAS: Banks with financial ties to carbon intensive fossils fuel investments face reputational harm, boycotts, divestment, and litigation that adversely affects shareholder value. Goldman Sachs has suffered extensive reputational damage from, and has been the target of significant public protests, based on its support of the Dakota Access Pipeline and other similarly controversial projects.
The Intergovernmental Panel on Climate Change recently underscored the harm of climate change, announcing that "rapid, far-reaching” changes are necessary to avoid disastrous levels of global warming; net emissions of carbon dioxide must fall 45 percent by 2030, reaching "net zero" by 2050.
Banks’ financing choices have a major role to play in promoting these goals. Bank lending and investments make up a significant source of external capital for carbon intensive industries. Every dollar banks invest in new fossil fuel infrastructure increases risk and slows the transition to a clean energy economy.
Goldman Sachs recognizes climate change and has taken certain related actions including pledging to conduct a carbon footprint analysis in its equity work, increase clean energy financing, and reduce direct carbon emissions from its offices and travel. Goldman’s Environmental Policy Framework requires assessing client climate risk and avoiding coal projects in developed nations (where there is limited demand for such projects). Significantly, Goldman’s climate change policies do not require reductions in the bank’s largest contribution to climate change -- its investments and loans in carbon-intensive fossil fuel projects and companies.
To the contrary, Goldman continues to make investments and loans in the most extreme fossil fuel projects. Last year, Goldman added coal loans to its portfolio. Between 2015 and 2017, Goldman poured nearly $9 billion into financing of tar sands, Arctic oil, and coal.
In contrast, peer banks have adopted policies reducing carbon in their loan and investment portfolios, including reducing or avoiding investments in extreme fossil fuels. ING adopted a methodology to measure the carbon content of its portfolio and decrease the climate impact of its loans. BNP Paribas’ policies phase out financing for companies tied to Arctic drilling, oil sands, shale development, and restrict financing for those tied to coal. Natixis committed to end financing of tar sands and Arctic drilling. The World Bank committed to end upstream oil and gas financing. Eleven banks adopted policies to end or substantially reduce financing for Arctic oil and/or tar sands projects.
BE IT RESOLVED: Shareholders request that Goldman Sachs adopt a policy to reduce the carbon footprint of its loan and investment portfolios in alignment with the 2015 Paris goal of maintaining global warming well below 2 degrees, and issue annual reports (at reasonable cost, omitting proprietary information) describing targets, plans, and progress under this policy.
SUPPORTING STATEMENT: Shareholders recommend the report include, among other issues at board and management discretion:
The carbon reduction benefits of expeditiously reducing exposure to extreme fossil fuel projects such as such as coal, Arctic oil and gas, and tar sands.