Finance giant Goldman Sachs is leading the industry’s transition to net zero, a goal for which we are running out of time. The latest proposal has been a sustainable investment fund, with which they intend to attract people concerned about the environment. We tell you all about this new option that you can include in your portfolio to make it green.
Investment leader goes “green mode”: how to launch sustainable investments
Goldman Sachs has been the key player in the sphere of sustainable investing these recent few years. The bank, on its part, has introduced integration of ESG (the environment, social, and governance) principles in its entire investment universe.
This includes setting up dedicated ESG funds, forming carbon neutrality targets as well as enhancing transparency in sustainability initiatives. In 2021, Goldman committed to implement $750 billion in sustainable finance over a ten-year period.
The bank also designated a target of net-zero greenhouse gas emissions to be reached for its financing activities, operations, and supply chain by 2050. These pledges, however, have raised the bank to the top in the provision of sustainable finance.
Now, Goldman invites another move in its sustainable investment structure with the launch of a new global green bond-ETF. The fund seeks to address this matter by offering investors an exposure to green bonds that are labelled, and this category finances environmental projects.
The new sustainable investment fund, a step towards ESG criteria
Getting to know about a new sustainable investment fund that the Goldman Sachs Asset Management has announced lately, is run after the investments meet specific ESG requirements.
The new fund, called Goldman Sachs Sustainable Future Fund, will mainly finance the companies and projects which Goldman Sachs considers to be helping to implement the transition to sustainable, low carbon-carbon future.
The Goldman Sachs Sustainable Future Fund aims to produce competitive or attractive investment returns by investing in companies in different sectors such as renewable energy, sustainable transportation, education, healthcare, etc.
The fund will employ a strict ESG screening process and use as select investment to score highly in terms of sustainability key metrics. The directives issued by Federal Government through new directives on environmental and investment issues are associated with it.
A size of 500 billion, the key to explaining the enormous size of this fund
The annual sum of $500 billion is projected by Goldman Sachs to be hit by the new sustainable investment fund which is an unprecedented amount by ESG fund standards. This would be the largest capital pool ever speculated by analysts, intended for socially responsible investments.
This fund will contribute to re-allocate large number of shares towards companies and projects that are actively involved in mentioned areas. Contemplating this substantial pool of money together with that of the private investors will have a larger ameliorating effect on the environmental wellbeing of the entire ecosystem.
The amount of $500 billion is a clear manifestation that the interest by institutional fund managers for ESG funds is on the rise. Pension funds and endowments have been upwardly adjusting their nature of strategies that are sustainable.
The firm, being large-sized and rich, is speculating that it can speed up this development and redirect more capital from the capital market to meaningful investments. If they become successful, the new mega-fund may well change the game with regard to sustainable finance.
Meeting the $500 billion target would accelerate capital allocation into ESG, which in turn would force the companies and asset managers to change their business strategies with an eye on sustainable growth.
As you have seen, this sustainable investment fund is designed to finance thousands of renewable campaigns and projects. The ecological transition needs, of course, capital to make it possible, and it will not only come from public bodies. Private funds will also contribute to making it happen, and you can now participate and earn money in the long run.
