"Goldman Sachs financed fossil fuel industry with $83.7bn since 2016, the major sector causing rising sea levels."
The Impaakt Team
8 min Read Time | March 19th 2021
The W.O.W. Award
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"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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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.