Goldman Sachs Will Not Fund Arctic Drilling, Pledges $750B to Fight Climate Change

In a move that drew praise from leading environmental organizations, Goldman Sachs announced a sweeping new “environmental policy framework” on Sunday, with major commitments to fund $750B in climate change resilience and adaptation projects, clean energy development, and to more thoroughly analyze fracking projects before funding them (though it does not rule them out entirely).  What they promised NOT to fund is also noteworthy — Goldman ruled out funding for projects to drill for oil and gas in the Arctic, new thermal coal mine and power plant development around the world, as well as projects that significantly convert or degrade a natural habitat.

Why This Matters:  This puts Goldman Sachs well in the lead among U.S. banks for making a commitment to both climate change and environmental protection generally.  According to the Sierra Club’s analysis, Goldman’s policy is the strongest regarding future coal development, and they are the only bank to put restrictions on funding for oil and gas projects.  But other banks globally have even more progressive environmental policies, and these foreign banks have already pledged not to fund Arctic drilling.  Still, this is a huge elevation of ambitions for one of the biggest names in banking and a financial boost for climate-related projects that was sorely needed, given the disappointing end to the UN climate meeting.

Goldman’s Rationale – It’s Good Business 

In an op/ed in the Financial Times, David Solomon, the CEO of Goldman Sachs, called on governments to put a price on the cost of carbon saying, “There is not only an urgent need to act, but also a powerful business and investing case to do so.”  On the Arctic drilling issue, members of the Gwich’in First Nation of Alaska met with officials from all the major U.S. banks in October of 2018 and explained the risks financing oil and gas exploration there would pose to the tribe’s way of life and livelihoods.  No other U.S. bank has made a similar pledge, though a dozen other foreign banks agreed to withhold support from Arctic oil and gas projects.

“Drilling in the Arctic Refuge would permanently destroy the primary food source of the Gwich’in people, our culture, and our way of life,” said Bernadette Demientieff, Executive Director of the Gwich’in Steering Committee. “The Trump administration may have made up their minds about selling off this sacred place, but the fight is far from over. We’re glad to see Goldman Sachs recognize that the Arctic Refuge is no place for drilling and we hope that other banks, and the oil companies they fund, will follow their lead.”

To Go Deeper:  Read the full Goldman Environmental Policy Framework here.  And read the analysis of its strengths and shortcomings by Sierra Club and Rainforest Action Network here.

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