Goldman Sachs ESG Investing

The New Goldman Sachs Growth Strategy: Sustainable ESG Financing

New York-based lender Goldman Sachs Group Inc., says its future is green.

Goldman Sachs says it has identified ESG (environment, social, and governance) investing as a core strategy key to the future of the firm.

According to Carey Halio, chief executive officer of Goldman Sachs Bank USA, the lender’s future will fund more ESG bonds on a regular basis than ever before in its history. It’s earmarking $750 billion in sustainable financing for use by 2030.

“We expect to issue once every 12 to 18 months with respect to benchmark issuance and we have the flexibility to do other kinds of liabilities as well in addition to the benchmark bond,” said Halio in an interview Friday. “We think it will be a core part of our strategy going forward.”

Goldman Sachs says it sold its first ESG bonds last Wednesday, valued at more than $3 billion at its peak; more than half of the bond went to ESG accounts.

“We do think the size of our ESG bonds will grow over time,” Halio told Bloomberg. “We think investors value the liquidity in the benchmark size issuance.”

The bonds will play a role in funding projects that meet green criteria set by the lender. These include clean energy, sustainable transport, and financial inclusion.

“The more issuers come and the more prominent those issuers are, only helps further the message that we are looking at things in a different way,” Stephen Liberatore, head of fixed-income ESG and impact investing strategies at the firm, told Bloomberg. “That’s a real positive and should help borrowers that maybe aren’t sure what they need to do.”

JP Morgan Chase Sustainability Bonds

ESG Investing

The Goldman Sachs announcement comes after JPMorgan Chase & Co. launched a similar initiative earlier this month. It says 2021 will be the year of ESG investing. Actor Robert Downey Jr. also recently launched an ESG investment platform. And last week, activist and former NFL quarterback Colin Kaepernick launched a SPAC corporation to help ESG-focused companies go public.

“[ESG investing] is going to be the fastest-growing sustainable instrument that we have if we extrapolate what we’ve seen already,” said Marilyn Ceci, global head of ESG debt capital markets at JPMorgan.

“The more issuers come and the more prominent those issuers are, only helps further the message that we are looking at things in a different way,” said Liberatore. “That’s a real positive and should help borrowers that maybe aren’t sure what they need to do.”

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