Goldman Sachs’ announcement to set 2030 emissions reduction targets under a “commitment to reach net zero financed emissions by 2050” makes them the third major U.S. bank to commit. The bank, which was the world’s 15th largest banker of fossil fuels in the five years after the Paris Agreement, new commitment comes after Goldman Sachs’ committed in March 2021 “to align its financing activities to a net zero 2050 pathway.”
The commitment is to reduce the physical emissions intensity of its portfolios within the oil and gas sector by 17-22 percent, power sector by 48-65 percent and auto manufacturing sector by 49-54 percent by 2030. But while Goldman Sachs committed to the reduction of emissions per unit of fossil fuel energy produced, the bank did not commit to reduce its financed emissions in absolute terms, according to Sierra Club.
“Goldman Sachs has the same problem as many of its peers of mistaking carbon intensity targets for an acceptable substitute for a meaningful emissions reduction plan,” Ben Cushing, campaign manager at Sierra Club Fossil-Free Finance, said. “Achieving the net-zero target Goldman and other banks have committed to means stopping support for fossil fuel expansion immediately. Anything less is just an attempt at good PR.”
According to the IEA’s Net Zero by 2050 scenario, “no investment in new fossil fuels is needed beyond current production.” These new targets “cover Goldman Sachs’ corporate lending commitments, debt and equity capital markets financing and on-balance sheet debt and equity investments,” the bank reported.
“Intensity-only targets are fully compatible with increases in absolute emissions and expansion of fossil fuels,” Jason Opeña Disterhoft, senior campaigner at Rainforest Action Network, said. “They certainly don’t guarantee that Goldman will deliver its fair share of emissions reductions by 2030, which the bank is committed to as a member of the Glasgow Financial Alliance for Net Zero.”
While the announcement was made, environmentalists think Goldman Sachs “missed the mark by not ruling out support for companies expanding oil, gas and coal.”
“The targets’ reliance on offsets also perpetuates fossil fuel business-as-usual and threatens the rights of communities impacted by offset schemes,” Opeña Disterhoft said. “Goldman Sachs, like all major fossil banks, has to immediately stop financing expansion of fossil fuels and set absolute emissions targets aligned with 1.5°C. If they don’t, investors and regulators should consider their net zero commitments to be greenwash.”