Welcome to the Impact Blog and welcome to this week's winner of the 'WOW' award. Each week our reviewing team scour the platform for the best work and come together to vote on one winner! It's our way of rewarding our talented community of writers.
"Unfortunately the winner of the WOW this week is another example of how we continue to see the financial industry fund fossil fuels and thus contribute to a sector whose impact on the planet is worrying to say the least. A great article on a topic that needs urgent attention and transformation."
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"GS financed fossil fuel industry with $83.7bn since 2016, the major sector causing rising sea levels."
Since 1850, the global temperature rose ≈1.1℃1. Along with the rising rate of CO2 emissions, the sea level has risen about 21–24 cm since 1880, increasing coastal flood risk2. In 2019, global CO2 emissions reached 36.42bn tonnes1,90% from fossil fuels3;p8. The same year, the global sea level was 87.6 mm above the 1993 average, the highest so far2. Projections on fossil fuel production may lead to the emission of 39bn t-CO2 by 20303;p14. Consequently, the world needs to stop financing fossil fuel extraction, in line with the 2015 Paris Agreement4, but bank-funding for fossil fuels rose from USD639bn in 2016 to $735bn in 2019: by $96bn5;p9. At current rates, fossil financing will hit $1 trillion per year by 20305;p10.
Goldman Sachs (GS) is among 35 banks that financed 2,100 fossil fuels companies with $2.7 trillion in the four years after the Paris Agreement5;p4. GS ranks 14/35, pouring $83.7bn since 20165;p8. The 35 banks were scored for their fossil fuel policies; the best scores are led by European banks. GS is only in 12th place, yet it is the leading US bank5;p18.
On Dec. 2019, GS revised its Environmental Policy (EPF) and decided to stop financing new oil exploration in the Arctic6;p12, new thermal coal mines6;p11, and to put conditions to funding coal-fired power plants6;p10, being the first US bank to adopt such decisions7. However, the revised EPF does not end the financing of fracking7. Albeit not yet a leader among global banks, its EPF is deemed the strongest among the big six US. Banks8;p1.
A 2020 report found banks have financed the US fracking industry with $224bn since 2016, despite its climate impacts9;p4. GS is 6th among the top 15 banks, pouring $11.6bn, 5.2% of the total fracking financing9;p7.
Having financed fossil fuels with $83.7bn in 4 years, Goldman Sachs is largely contributing to rising sea levels through fossil fuels' emissions. Goldman Sachs needs to strengthen its fossil fuel policy and further restrict fracking projects.