Corporate TreasuryFinancial Supply ChainGoldman Sachs launches Sustainable Finance Group

Goldman Sachs launches Sustainable Finance Group

New ESG fund attracts big US corporations such as Apple and Jet Blue.

A number of US corporations, including Apple and JetBlue Airways are taking advantage of a new sustainable finance offering launched by Goldman Sachs Group.

The new Goldman Sachs $1.5bn money-market fund focuses on enabling corporate treasurers steer money to bond brokerages operated by minorities, women and veterans, reflecting a growing shift toward investing with environmental, social and governance, or ESG, principles.

The news comes as Goldman Sachs revealed details around the launch of its Sustainable Finance Group, which focuses on identifying and executing on sustainable growth opportunities. According to an email sent to its ‘people’, the Group will also further reinforce their efforts through Launch With GS, the Urban Investment Group, 10,000 Women and 10,000 Small Businesses and their internal operational sustainability initiatives.

The group will be led by John Goldstein, co-founder Imprint Capital, a dedicated sustainable investing firm acquired by Goldman Sachs Asset Management in 2015. Within the group, Kyung-Ah Park will continue to lead the environmental markets work and drive innovative finance. Kara Succoso Mangone will serve as chief operating officer of the effort, leveraging her experience engaging with global investor base on these issues.

The group’s efforts in delivering sustainable growth solutions will be guided and supported by a cross-divisional steering group comprising senior business leaders who are already engaged on these opportunities. This group will ensure effective coordination and drive several initiatives to provide the most comprehensive sustainability expertise across financing, advisory, risk management, asset management and investing.

Rise of ESG

Environmental, Social and Governance (ESG) has quickly gained advocacy, reflecting a shift towards investing with green, social and sustainable options.

The latest data from Morningstar reveals that funds focusing on environmental, social and governance issues attracted $8.9 billion worth of net inflows during the first six months of the year. That compares to $5.5 billion for all of 2018 and represents a trend that isn’t likely to slow anytime soon.

According to BBVA, throughout 2019 the issuance of these bonds has consistently been above the monthly averages of the previous three years. Advisers and investors are taking notice as more funds achieve three-year track records showing solid performance.

According to the Climate Bonds Initiative, green bonds will expand to $250 billion in 2019.

Sustainable growth solutions

Apple is a key advocate of ESG and Green Bonds, with the company completing a $1.5 billion issue last year to finance the company’s conversion to renewable energy and increase its use of biodegradable materials. Meanwhile, Japanese carmaker Toyota concluded its own $1.75 billion green bond issuance back in 2014, helping it to fund consumer loans and leases for its line of hybrid vehicles that includes the incredibly popular Toyota Prius.

The $1.5 billion money-market funds also help corporate treasurers drive investment to bond brokerage run by minorities, women and veterans, highlighting a growing shift towards investing with ESG principles. Green bonds are fast becoming an essential treasury tool.

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