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Out of Our Minds
Tuesday, November 22, 2005 11:49 AM
Gold Goes Green
Anita Sharpe on Making a Difference

Investment banking giant Goldman Sachs says it plans to invest $1 billion in projects that generate energy without using oil and gas -- and it is encouraging all of its 24,000 employees to 'promote activities that protect forests and guard against climate change,' according to a story in the New York Times.

Is this the tipping point for Wall Street and corporate America?

. . .Shameless sales pitch: we have a great holiday gift idea for those 24,000 employees -- subscriptions to Worthwhile magazine. Great deals on bulk orders :-). . .

Hit 'continue' to read the whole story.

Goldman to Encourage Solutions to Environmental Issues \n\n \nBy CLAUDIA H. DEUTSCH\nPublished: November 22, 2005\nAs of today, the Goldman Sachs Group is officially green.\n\nThe big investment banking firm has announced a policy that details how its 24,000 employees - be they bankers, analysts or purchasing agents - should promote activities that protect forests and guard against climate change.\n\nGoldman, which counts paper companies, refiners and car companies among its clients, stopped short of saying it would reject clients with questionable environmental practices. Instead, it said it would 'encourage' clients in 'environmentally sensitive' areas to use 'appropriate safeguards.' \n\nIt committed itself to investing $1 billion in projects that generate energy from sources other than oil and gas. And it strongly endorsed stringent federal regulation. \n\nGoldman said it would establish a Center for Environmental Markets to study how the free-market system can solve environmental problems. Henry M. Paulson Jr., Goldman's chairman, said the center - which will cost $5 million to set up and will be operating within six months - would help shape public policy. \n\n'We don't have a lot more time to deal with climate change,' said Mr. Paulson, an outspoken environmentalist who is also chairman of the Nature Conservancy. 'We need the right balance between regulation and market-based approaches.'\n\nGoldman is not the first financial services firm to adopt an environmental policy. In response to a 2003 campaign led by the Rainforest Action Network, more than 30 commercial banks signed the Equator Principles, which call for them to assess environmental risk before financing a project. \n\nThis year, J. P. Morgan Chase set out strict environmental dos and don'ts for each part of its business. And Merrill Lynch now includes environmental issues in the due-diligence checklist its bankers use before underwriting stock issues.\n\nBut environmental advocates say that the Goldman policy keeps going where others leave off.\n\n'They are spending intellectual capital and energy on finding market-based solutions to environmental problems,' said Michelle Chan-Fishel, program manager for green investments at Friends of the Earth. \n\nJonathan Lash, president of the World Resources Institute, was more blunt. 'Goldman has given us things to measure them by,' he said.\n\nThe Goldman policy is certainly the most explicit. J. P. Morgan calls for public policy that 'establishes certainty for investors and allows significant investments in greenhouse gas emissions.' Goldman endorses a 'strong policy framework that creates long-term value for greenhouse gas emissions reductions and consistently supports and incentivizes the development of new technologies that lead to a less carbon-intensive economy.' \n\nGoldman, which already owns wind farms and power plants and recently contributed land for a protected forest in Chile, has also set such quantifiable goals as reducing greenhouse gases from its office buildings by 7 percent by 2012 and developing uniform green building standards for all its properties. \n\nIt has pledged to increase its activities in carbon trading, which grants companies the right to emit set quantities of carbon dioxide and sell the rights if they emit less than allowed. It has also committed its equity research department to do extensive environmental studies.\n\n'Goldman is expressly acknowledging the financial risks of investing in a company with weak environmental performance,' said Michael J. Brune, executive director for Rainforest Action Network.\n\nGoldman said it would insist that its own buildings be constructed of certified wood - wood that was not illegally logged - and would 'prefer' to finance forestry projects that have been similarly certified. Similarly, it said, it would 'prefer' to finance projects in which the local communities were consulted.\n\n'It is not our job to dictate to clients what they must do,' Mr. Paulson said. 'We won't finance projects that damage the environment, but we won't refuse to underwrite your security or handle your merger because you are not as environmentally strong as we would like.'\n\nEnvironmentalists wince at some of the omissions, but concede that no bank has pledged to shun clients on environmental grounds.\n\n'We can't expect unilateral disarmament,' said Eileen Claussen, president of the Pew Center on Global Climate Change. 'If Goldman works to get stricter federal policies, and if it disseminates its research to clients and policy makers, the issue may be rendered moot anyway.' \n\n

1 comment

Janet Auty-Carlisle - 11/22/2005 5:39:34 PM
At the risk of sound like a cynic my feelings are as follows:
1. Good for them for going public with this decision.
2. Good for them for encouraging others to do the same.
3. Shame on them for not refusing to take on clients who choose to continue plundering the earth.
4. If a company as conservative as this thinks the environment is worth investing in methinks there must be some good money in it for them.
5. Let's see how much of an impression they make on the rest of the big guns in encouraging them to move forward.

Living la vida fearless, Jan


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