Goldman Criticized for `Half-Measures' on Cutting Coal Supportby
Bank promises to be `selective' in backing mines, power plants
Citigroup, Bank of America pledged to cut exposure outright
Goldman Sachs Group Inc. pledged to be “selective" in financing coal-industry projects as part of its response to climate change, a stance that underwhelmed environmentalists who want Wall Street to stop backing the most polluting fossil fuel.
In a policy statement published Monday, the New York-based investment bank said it would weigh environmental impacts before financing coal-fired power plants or mining ventures around the world. Still, Goldman said the fuel remains a key source of affordable power for developing countries.
The pledge fell short of commitments this year from companies including Citigroup Inc. and Bank of America Corp., according to the Rainforest Action Network, an advocacy group that’s pushed banks to cut their support for coal. The other two lenders made explicit commitments to reduce their financing of the industry, citing its contributions to greenhouse-gas emissions blamed for warming the planet. Goldman, while acknowledging the dangers of climate change, didn’t go that far.
“The bank is playing catch-up with half-measures when leadership from major financial institutions is critically needed," said Ben Collins, a senior campaigner at the Rainforest Action Network. “Financing coal mines and power is simply incompatible with climate stabilization."
In a video released Monday, Chief Executive Officer Lloyd Blankfein touted the firm’s commitment to environmental projects, including a $150 billion goal for financing and investing in renewable energy over the next decade.
The new policy “puts a stake in the ground about what we are going to do to stop the accelerating damage being done to the environment and to try to steer more capital to environmentally favorable technologies," Blankfein said.
The policy laid out guidelines Goldman says it will use in weighing ecological factors in its financing decisions. The bank will “apply enhanced due diligence" to transactions involving coal mining, the guidelines state. “For financings directly supporting new coal mine development, we will be selective in the transactions we undertake and where the sensitivities are too high, we will forgo the opportunity," it says.
The bank will apply the same standards to financing coal-fired power plants outside the U.S. Within the country, Goldman won’t back any new coal plants unless they include emissions-reducing technology such as carbon-capture and storage, a method for trapping greenhouse gases that’s so far proven too expensive for commercial use.
While noting coal is one of the biggest sources of climate-change pollution, Goldman’s policy also says that in many impoverished countries, it “remains a significant source of affordable energy."
“We take environmental risks seriously and thoughtfully approach what are very complex issues," Goldman spokesman Andrew Williams said in an e-mail Tuesday.
Citigroup said last month that its credit exposure to coal mining had “declined materially" and would continue to do so. Bank of America and Credit Agricole SA said earlier this year that they would cut back on financing such projects.
“They made clear statements that they were moving away from financing coal mining and coal generation," said Collins, of Rainforest Action Network. “We think it’s well past time for Goldman to do the same."
Goldman loaned less to coal businesses last year than most of its peers, according to Rainforest Action Network’s annual report on the industry. Goldman ranked 19th of 20 firms in terms of its coal-mining business, with $1.07 billion in financing. It ranked 18th of 20 for lending and underwriting coal-fired power plants, with $1.56 billion. Citigroup and Bank of America ranked higher in both categories.