Goldman Sachs becomes first major American bank to prohibit Arctic oil financing

“Goldman Sachs is right to recognize that destroying the Arctic Refuge would be bad business. We hope other American banks will follow their lead.”

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Image Credit: REUTERS/Lucas Jackson RTX17T1D

New Arctic drilling and exploration will no longer be financed by Goldman Sachs. The multinational investment bank made an update to its energy policy to become the first American bank to prohibit Arctic oil financing.

The announcement came as many of the world’s largest banks have made the same commitment, a press release stated. Goldman Sachs now joins UniCredit, Royal Bank of Scotland, and Barclays in protecting the Arctic National Wildlife Refuge against the threats of fossil fuel operations.

“Drilling in the Arctic Refuge would permanently destroy the primary food source of the Gwich’in people, our culture, and our way of life,” Bernadette Demientieff, executive director of the Gwich’in Steering Committee, said. “The Trump administration may have made up their minds about selling off this sacred place, but the fight is far from over. We’re glad to see Goldman Sachs recognize that the Arctic Refuge is no place for drilling and we hope that other banks, and the oil companies they fund, will follow their lead.” 

Goldman Sachs also became “the first major American bank to rule out funding new thermal coal mining and coal power projects worldwide,” according to a press release.

“The Trump administration may not care about ignoring the will of the American people or trampling Indigenous rights, but a growing number of major financial institutions are making it clear that they do,” Ben Cushing, Sierra Club campaign representative, said. “Goldman Sachs is right to recognize that destroying the Arctic Refuge would be bad business. We hope other American banks will follow their lead.”

According to a press release, Goldman Sachs new energy policy’s updated commitments are as follows:

  • “We will decline any financing that directly support the development of new coal fired power generation unless it has carbon capture and storage or equivalent carbon emissions reduction technology (‘CCS’). This applies globally in both developed and developing economies…”
  • “For financing involving any power sector companies that derive a significant portion of their generation from coal, we will engage with the companies to understand their strategy to diversify away from coal and reduce overall carbon emissions, with the goal of supporting their low carbon transition in line with the Paris Climate Agreement…”
  • “For transactions directly financing new thermal coal mine development or any mountaintop removal mining, we will decline the opportunity.”

While the bank’s updated energy policy rules out financing for oil drilling, it failed to take a stand against the financing of tar sands and fracking. But peers commend Goldman Sachs’ new commitment and its outline that “coal as an industry has no future,” while setting a precedent on oil and gas.

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