Goldman Sachs Asset Management, the fund management arm of the investment banking giant, will use its internal environmental, social and governance (ESG) analysis to help it integrate environmental factors into its proxy voting policies.
It’s part of a sweeping set of ambitions the firm has set out, including a revised $150bn target for investing in clean energy.
“We have integrated the analysis of ESG factors into our investment and company engagement processes across our Fixed Income and Fundamental Equity strategies, as well as within the external manager due diligence process of Alternative Investments and Manager Selection (AIMS),” Goldman says in its new, 19-page Environmental Policy Framework.
“We will utilize this analysis to engage with companies on ESG topics, and, as appropriate, integrate environmental considerations into GSAM’s proxy voting policies.” It goes on to say it would “seek to communicate on our progress and contribute to the development of best practices within the investment community”.
It adds that certain GSAM investment products conduct a carbon footprint analysis – at the portfolio and individual holdings level – to quantify the absolute and intensity of greenhouse gas emissions embedded in the portfolio. The Wall Street titan says it plans to expand carbon footprint analysis across its Fundamental Equity business and product offerings “to help inform our investment decisions more broadly.”The firm, which recently adopted proxy access and became a member of the International Corporate Governance Network (ICGN), is also working with clients to develop methodologies by which the carbon intensity of their equity portfolios can be reduced by over 70% applying risk management techniques.
Goldman, which provides training on incorporating ESG factors for all new equity analysts, adds it is committed to expanding the scope of its GS SUSTAIN strategy, saying it the GS Sustain Global Focus List has outperformed its global benchmark by nearly 40% from inception in June 2007 through year-end 2014.
Goldman said it would decline any financing transaction that directly supports the development of new coal fired power generation in the US. It would also decline financings that are specifically for coal projects involving mountain top removal. It would apply “enhanced due diligence” for unconventional oil & gas hydraulic fracturing, oil sands deals and palm oil companies. It will not knowingly finance companies or projects that collude with or engaged with illegal logging or uncontrolled fire.
On human rights, Goldman says this: “We have a responsibility to help protect, preserve and promote human rights around the world.” It says it “will not knowingly” finance any potential transactions where there is credible evidence of child labor, forced labor or human trafficking. Link