Goldman Sachs Exits Climate Coalition

By Simon Jessop and Virginia Furness

LONDON (Reuters) – Goldman Sachs has announced its exit from a sector coalition aimed at aligning bank lending and investment activities with global climate change efforts, making it the most prominent member to leave the Net-Zero Banking Alliance (NZBA).

This decision occurs amid pressure from some Republican politicians who argue that NZBA membership could violate anti-trust regulations. Although Goldman Sachs did not explicitly state a reason for its departure, it emphasized future strategic goals and a regulatory push for mandatory sustainability efforts.

The bank stated, "We have the capabilities to achieve our goals and to support the sustainability objectives of our clients. Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world."

Uncertainty remains regarding potential changes to U.S. climate-related company disclosure rules under President-elect Donald Trump; however, Goldman Sachs and other large American firms will still need to comply with European Union regulations.

Members of the voluntary NZBA commit to aligning with global aims of achieving net-zero emissions by 2050, setting specific targets, and publishing annual progress reports. Goldman Sachs confirmed its commitment to continue this reporting despite its departure.

The bank stated, "We have made significant progress in recent years on the firm's net-zero goals and we look forward to making further progress, including by expanding to additional sectors in the coming months."

Goldman Sachs aims to support clients in achieving sustainability goals while measuring and reporting their progress. The bank reiterated its commitment to the energy sector and announced it would continue financing and advising clients in this area, in addition to investing in decarbonisation technologies. CEO David Solomon highlighted the dual approach, stating, "We need to do both. It’s not an or, it’s an and."

Goldman Sachs has pledged to align its financing activities with a net-zero target by 2050 and has set interim targets to assist clients in reducing carbon emissions within the energy, power, and automotive sectors.

Earlier this year, several U.S. investors, including its fund management arm, withdrew from a global coalition aimed at reducing climate-damaging emissions. Investors like BlackRock are currently facing lawsuits from Texas and ten other Republican-led states over alleged anti-trust violations.