Goldman Sachs will decline financing for new Arctic oil exploration and production and for new thermal coal mine development or strip mining in its updated environmental policy which makes the investment bank the U.S. bank with the strongest restrictions on funding fossil fuels.
According to the Wall Street giant's revised policies, "We will decline any financing transaction that directly supports new upstream Arctic oil exploration or development. This includes but is not limited to the Arctic National Wildlife Refuge."
"For transactions directly financing new thermal coal mine development or any mountaintop removal mining, we will decline the opportunity," the investment bank's policies further read.
Goldman Sachs will also sit down with companies whose revenues come chiefly from thermal coal mining production to understand their strategies to diversify away from thermal coal mining before considering financing that involves any such companies.
"With this policy revision, Goldman Sachs becomes the first major U.S. bank to establish explicit restrictions on financing for any part of the oil and gas sector. It is also the first major U.S. bank to rule out direct finance for thermal coal mines and plants worldwide," Rainforest Action Network (RAN) said, commenting on Goldman's new policies.
"The smart money on Wall Street is drawing red lines on oil and gas, and exiting coal. The big money has to respond, or it will be left holding the bag. Over to you, Jamie Dimon and JPMorgan Chase," said RAN.
Earlier this year, an investigation by the Guardian showed that the world's top investment banks have poured US$700 billion into coal, oil, and gas projects financing since the Paris Agreement was signed, with JP Morgan providing the single largest sum-US$75 billion.
Goldman Sachs's new funding policies regarding fossil fuels still lag behind some major European banks that had pledged stricter financing rules for oil, gas, and coal.
Many banks in Europe have faced in recent years increased public and activist pressure to stop funding fossil fuel projects. Some of them have said they would stop providing project-specific financing for coal-fired power plants or exploration and production of oil sands and oil in the Arctic.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More