Goldman Sachs (NYSE:GS) has adopted the first comprehensive environmental policy by a global investment bank.
The policy acknowledges the scientific consensus on climate change and calls for urgent action by public policy makers and federal regulators to reduce greenhouse gas emissions.
It is also the first in the financial sector to acknowledge the degradation of global “ecosystems services”: the provision of water and food, control of pests and pathogens, renewal of fertile soil, control of floods, and more.
In another industry precedent, Goldman Sachs announced it would establish and fund a $5 million Center for Environmental Markets, which will engage in research to develop public policy options for establishing markets around climate change, biodiversity conversation and ecosystem services. CEO Henry Paulson Jr. said the center would open within six months and would help shape public policy.
Goldman Sachs also announced it would invest $1 billion in renewable energy projects and businesses, and that it plans to be a leading U.S. wind energy developer and generator.
It also plans to promote LEED green building standards and Forest Stewardship Council certification standards.
Finally, as a major owner and operator of fossil fuel-fired power plants in the U.S., Goldman Sachs agreed to publicly report and work to reduce greenhouse gas emissions from its plants while also supporting the need for a national policy to limit greenhouse gas emissions.
“We don’t have a lot more time to deal with climate change,” said Paulson, who is also chairman of the Nature Conservancy. “We need the right balance between regulation and market-based approaches.”
Similar to recent policies from Citigroup (NYSE:C), Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JMP), the firm’s commitment includes explicit prohibitions against financing or investing industrial activity in ecological no-go zones and recognizes the rights of indigenous peoples to free, prior informed consultation.
“The environmental industry is about to take off, as more investors realize they can reap returns from cleaner technologies,” said Dan Bakal, director of electric power programs at Ceres, a coalition of investors and environmental organizations.
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