Impact Report 2023: Goldman Sachs Green, Social and Impact Bond Funds

Impact Report 2023: Goldman Sachs Green, Social and Impact Bond Funds

At Goldman Sachs Asset Management, we are committed to helping investors manage the risks and the opportunities created by the transition to a more sustainable economy. Our green, social and impact bond funds are some of the solutions we provide to help clients accomplish their goals related to the climate transition and inclusive growth.

Our green bond funds seek to advance the climate transition by investing in bonds whose proceeds are used to finance environmentally beneficial projects. These projects are aligned with the Green Bond Principles,1 a set of voluntary best-practice guidelines for issuers, across categories including renewable energy, clean transportation and green buildings. The Goldman Sachs Social Bond fund aims to address or mitigate specific social issues and to achieve positive outcomes aligned with key categories set out in the Social Bond Principles,2 including affordable basic infrastructure, access to essential services, affordable housing and employment generation.

The Goldman Sachs Global Impact Corporate Bond fund, launched in 2023, invests in a portfolio of green, social and sustainability bonds issued by companies around the world, providing exposure to the full range of opportunities in the transition to a more sustainable economy. Sustainability bonds are used to finance a combination of environmental and social projects and initiatives.

In our Impact Report for 2023, we share the expected impact associated with the investments in our five green bond funds3 across these key metrics: annual greenhouse gas (GHG) emissions avoided, renewable energy capacity, annual renewable energy generation output, and annual energy savings. For the Goldman Sachs Social Bond fund, we measure the number of expected beneficiaries from the projects supported by the bonds in the portfolio. These same environmental and social metrics are also used in our reporting on the Goldman Sachs Global Impact Corporate Bond fund.4 We now manage a total of €11 billion in assets across all these funds.5

Green Bond Funds: Impact in 2023Green bond funds impact in 2023

Source: Goldman Sachs Asset Management. Data provided by issuers. As of December29, 2023. These metrics are at a point in time as of the date indicated and are subject to change over time. For information on the methodology used to calculate these metrics as well as any limitations or assumptions within the calculations, see page 54 of this report.

Social Bond Fund: Impact in 2023Social Bond Fund: Impact in 2023 - Beneficiaries

Source: Goldman Sachs Asset Management. Data provided by issuers. As of December 29, 2023. These metrics are at a point in time as of the date indicated and are subject to change over time. For information on the methodology used to calculate these metrics as well as any limitations or assumptions within the calculations, see page 29 of this report.

Social Bond Fund: Impact in 2023Social Bond Fund: Impact in 2023 - Beneficiaries

Source: Goldman Sachs Asset Management. Data provided by issuers. As of December 29, 2023. These metrics are at a point in time as of the date indicated and are subject to change over time. For information on the methodology used to calculate these metrics as well as any limitations or assumptions within the calculations, see the Impact Calculation Methodology section on page 54 of this report. For information on the “Expected Number of Beneficiaries” metric, see page 29.

In addition to presenting and contextualizing the expected impact our green, social and impact bond funds had in 2023, this report sets out our approach to investing in these markets and explains the tools we use to screen issuers and gauge the credibility of their sustainability ambitions. As a result of our screening process, which looks beyond the label at the underlying projects and issuers’ sustainability strategies, we reject 36% of the green bonds tracked in our database as well as 30% of the social bonds.6

The report also explores our commitment to promoting and exercising effective bondholder engagement with the issuers in the portfolios we manage on behalf of our clients. This includes investment research and monitoring and our efforts to facilitate market development. Within Goldman Sachs Asset Management’s public markets investing business, the Global Stewardship Team helps drive the continued enhancement of our approach to stewardship in collaboration with our public investment teams. We define "investment research and monitoring engagements" as active dialogue or exchange of written communication with a company or issuers undertaken primarily to seek information or to inform our investment decisions. For example, research analysts engaging on earnings, business operations, or other strategic matters.