1、Asset&Wealth ManagementTCFD REPORT 2022TABLE OF CONTENTSStrategy33Asset&Wealth Management:Our Climate StrategyEmpower Decisions through Actionable Climate IntelligencePublic Markets InvestingPrivate Markets InvestingPrivate Wealth ManagementUnlock Potential Value through the Management of Climate-Re
2、lated Risks,Opportunities,and ImpactManage and Mitigate Climate-Related RisksHelp Portfolio Companies and Client Assets Navigate and Benefit from the Climate TransitionInvest in Climate OpportunitiesMobilise the Full Range of Our Resources to Meet Clients NeedsPublic Markets InvestingPrivate Markets
3、 InvestingPrivate Wealth ManagementImprint within the External Investing Group(“XIG”)Description of Relevant Climate-Related Risks and OpportunitiesPublic Markets Investing Climate-Related Risks and OpportunitiesPrivate Markets Investing Climate-Related Risks and OpportunitiesPrivate Wealth Manageme
4、nt Climate-Related Risks and OpportunitiesResilience of Asset&Wealth Managements Climate StrategyIdentification and Assessment of Climate-Related Risks and OpportunitiesApproach to Climate Scenario AnalysisIntroduction04Introduction from our Chief Investment OfficerAbout Asset&Wealth ManagementScope
5、 of ReportCommentary on Asset&Wealth Managements Inaugural TCFD ReportSummary of TCFD RecommendationsDefinition of Climate-Related RisksCompliance StatementsOther Goldman Sachs Climate-and Sustainability-Related ReportsOther Public Markets Investing ConsiderationsExecutive Summary15Asset&Wealth Mana
6、gement:Our Climate StrategyRecent HighlightsGovernance21Board OversightGSAMI Board Oversight BodiesGSI Board Oversight BodiesManagement OversightAsset&Wealth Management Oversight BodiesPublic Markets Investing Oversight BodiesPrivate Markets Investing Oversight BodiesPrivate Wealth Management Oversi
7、ght BodiesFirmwide and Regional Oversight BodiesBusiness and Functional Groups OversightAWM TCFD REPORT 20222 Table of Contents|Appendices93Appendix A:Abbreviations UsedAppendix B:In-scope Asset&Wealth Management AssetsAppendix C:Additional Details on Public Markets InvestingMemberships and Collabor
8、ative Engagement within Public Markets InvestingClimate-and Sustainability-Related Training within Public Markets InvestingAppendix D:Engaging with Third PartiesAppendix E:Additional Details on MetricsAdditional Details on Metrics for Public Markets Investing and Private Wealth ManagementAdditional
9、Details on Metrics for Private Markets InvestingDisclaimers99Risk Management74Identifying and Assessing Climate-Related RisksClimate-Related Risks CategorisationClimate-Related Risks Identification and AssessmentIntegration of Climate-Related Risks across the Investment LifecyclePublic Markets Inves
10、tingPrivate Markets InvestingIncorporating Climate-Related Risks into Overall Risk ManagementPublic Markets InvestingPrivate Markets InvestingPrivate Wealth ManagementClimate-Related Regulatory ResponsePublic Markets InvestingPrivate Markets InvestingPrivate Wealth ManagementMetrics and Targets83Met
11、ricsOverview of GHG Emissions Metrics DisclosedMetrics Results and CommentaryCalculation MethodologyPublic Markets Investing and Private Wealth Management:Approach to Calculating MetricsPrivate Markets Investing:Approach to Calculating MetricsTargetsAWM TCFD REPORT 20223 Table of Contents|01SectionI
12、NTRODUCTION4 AWM TCFD REPORT 2022Introduction|INTRODUCTION FROM OUR CHIEF INVESTMENT OFFICERJulian C.Salisbury Chief Investment Officer of Asset&Wealth ManagementGiven the scale and complexity of the global climate transition,managing climate-related risks and opportunities is integral to serving ou
13、r diverse client base.We see the risks and opportunities of this transition playing out across the real economy,the markets in which we transact,investment portfolios,and our client franchise.Climate change is an important and growing area of concern for many of our clients,both from a risk-return a
14、nd an impact perspective.At the same time,it is increasingly impacting our clients investments,whether through physical risk impacts to operations,or challenges navigating the transition to a lower-carbon economy.We acknowledge that the transition to a low-carbon economy is complex and will take tim
15、e.As capital helps fundamental sectors move toward decarbonisation,there will be trade-offs along the way.Our approach to climate transition is pragmatic and underpinned by our core value of serving our clients.As a result,we take a client-centric approach to integrating clients objectives into thei
16、r portfolios with an aim to achieve long term,risk-adjusted returns and to prudently manage investments for our clients.1 With our scale and capabilities,Asset&Wealth Management(“AWM”)has a powerful platform to unlock value for our clients through the climate transition.We combine breadth,across pub
17、lic and private markets,proprietary and third-party products,portfolio strategy and implementation,and depth,with specialist climate teams and strategies.We also help our clients achieve their goals by drawing on the broader climate expertise and capabilities across Goldman Sachs.We have developed c
18、limate products and solutions,leveraged analytical tools,utilised climate-related data to inform our investment decisions,and partnered with clients and portfolio companies to uncover opportunities for transformative climate impact and returns.Through our efforts to manage clients capital in a prude
19、nt manner,we are supporting the climate transition by seeking to price climate-related risks appropriately within markets,supporting portfolio companies to mitigate risks and decarbonise their operations,and providing capital towards climate technologies and solutions.We are proud to highlight a num
20、ber of initiatives,including investing in sustainable investments across AWM,employing more than 160 climate-and sustainability-focused professionals across AWM,2 and helping the firm to achieve 55%of the firmwide$750 billion sustainable finance commitment.3,4We recognise the importance of climate-r
21、elated disclosures in our climate strategy and are developing our approach to managing financially material climate-related risks and opportunities.As investors,we seek to actively work with portfolio companies to encourage financially material disclosure on climate-related data,as this information
22、can help to drive more informed investment decisions,where relevant.With that in mind,we are pleased to share our first Task Force on Climate-Related Financial Disclosures(“TCFD”)report focused on Asset&Wealth Management and its business activities carried out within our United Kingdom legal entitie
23、s.Looking ahead,we are focused on continuing to develop climate solutions for our clients,and further integrating climate considerations across our business.1 There is no guarantee that objectives will be met.2 As of 31 December 2022.This figure is at a point in time and is subject to change over ti
24、me.Figures are related to Goldman Sachs professionals at the organisational level and include individuals deemed to spend 80%or more of their time on sustainability related research,portfolio management,stewardship,engineering,and/or risk management.3 As of 31 December 2022.Goldman Sachs has achieve
25、d approximately$425 billion in commercial activity,including$215 billion in climate transition,$67 billion in inclusive growth and the remainder in multiple themes.See Goldman Sachs 2022 Sustainability Report.4 Firmwide sustainability goals are not binding characteristics of specific products.There
26、is no guarantee that any particular ESG objective will be pursued or met with respect to any particular product.AWM TCFD REPORT 20225 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesABOUT ASSET&WEALTH MANAGEMENTAsset&Wealth Management(“Asset&We
27、alth Management”,“AWM”,“we”,“our”,or“us”)is a business segment within The Goldman Sachs Group,Inc.(“Goldman Sachs”,“the firm”).Asset&Wealth Management provides investment services to help clients preserve and grow their financial assets and achieve their financial goals.We provide these services to
28、our clients,both institutional and individuals,including investors who primarily access our products through a network of third-party distributors around the world.5 5 AWM also invests Goldman Sachs on-balance sheet alternative assets.Figure 1:Goldman Sachs Organisational StructureReal EstateSustain
29、able Investing GroupQuantitative Investment StrategiesMulti-Asset SolutionsPrivate EquityInfrastructureGrowth EquityFixed IncomeExternal Investing GroupFundamental EquityPrivate CreditThe Goldman Sachs Group,Inc.Business activities are in-scope for this report Business UnitAsset&Wealth ManagementGlo
30、bal Banking&MarketsPlatform SolutionsBusiness SegmentBusiness LinePrivate Markets InvestingPublic Markets InvestingPrivate Wealth ManagementAWM includes Goldman Sachs Asset Management,which includes investing in public markets(“Public Markets Investing”)and private markets(“Private Markets Investing
31、”),and Goldman Sachs Private Wealth Management(“Private Wealth Management”).See Figure 1 below for additional details on Asset&Wealth Managements position within the broader Goldman Sachs organisational structure.AWM TCFD REPORT 20226 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk
32、ManagementMetrics and TargetsAppendicesToday,AWM is a top five global active asset manager6 and a top five global alternatives manager6 with a premier wealth management franchise.As of 31 December 2022,7 we have more than$2.5 trillion in assets under supervision(“AUS”)globally.86 Rankings as of 4Q22
33、,as measured by actively managed AUS.Peer data compiled from publicly available company filings,earnings releases and supplements,and websites,as well as eVestment databases and Morningstar Direct.GS total Alternatives investments of$450 billion as of 4Q22 includes$263 billion of Alternatives AUS an
34、d$187 billion of non-fee-earning Alternatives assets.7 Note:this figure represents global AWM assets under supervision.8 AUS includes assets under management and other client assets for which Goldman Sachs does not have full discretion.9 GSAM B.V.is a separate European legal entity and is not in-sco
35、pe for this TCFD report.10 https:/ than$2.5tnIn addition,Goldman Sachs completed the acquisition of NN Investment Partners(“NN IP”)in April 2022,which was subsequently rebranded as Goldman Sachs Asset Management B.V.(“GSAM B.V.”).9 GSAM B.V.is a leading European asset manager based in The Hague,Neth
36、erlands,which at the time of acquisition managed$340 billion in assets for institutions and individual investors worldwide.10 The integration of GSAM B.V.into AWM is ongoing,and we have been working together to leverage our combined climate-related expertise and capabilities to further develop and e
37、mbed a sustainable investing approach in certain strategies and offerings.AWM provides investment services to help clients preserve and grow financial assets and achieve their financial goals.We manage assets across a broad range of investment strategies and asset classes,including equity,fixed inco
38、me,and private markets.Our Private Markets Investing activities,which are typically longer-term,include investments in private equity,private credit,real estate,and infrastructure assets.Within Private Wealth Management,we provide tailored wealth advisory services to clients.We operate globally,serv
39、ing individuals,families,family offices,and foundations and endowments.These solutions begin with identifying clients objectives and continue through portfolio construction,asset allocation and risk management,and investment execution.We leverage a broad investment platform,and our global execution
40、capabilities,to help clients achieve their investment goals.The AWM segment also benefits from the broader Goldman Sachs ecosystem,which gives clients access to a wide range of products and solutions,as well as our market expertise.Beginning with the fourth quarter of 2022,consistent with announced
41、organisational changes,Goldman Sachs began managing and reporting its activities in three new business segments,including the AWM segment.Prior to these changes,the Asset Management segment was managed and reported separately from the Consumer&Wealth Management segment.As such,certain climate-relate
42、d processes,governance structures,and strategies are still evolving across the Public Markets Investing,Private Markets Investing,and Private Wealth Management business lines within AWM,and each business may take a different approach in response to climate-related risks and opportunities(within the
43、broader context of Goldman Sachs climate strategy).Over time,it is intended that climate-related activities will be further integrated.AWM TCFD REPORT 20227 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesSCOPE OF REPORTThe Asset&Wealth Managem
44、ent Task Force on Climate-Related Financial Disclosures 2022 Report(”AWM UK TCFD 2022 Report”,“this report”)has been developed in line with the United Kingdom(“UK”)Financial Conduct Authority(“FCA”)rules and guidance as set out in the Environmental,Social,and Governance Sourcebook (“ESG Sourcebook”)
45、.Based on the ESG Sourcebook,the Goldman Sachs legal entities in-scope for this report are Goldman Sachs International(“GSI”)and Goldman Sachs Asset Management International(“GSAMI”).As such,this report includes details and perspectives specific to the in-scope portfolio management activities of GSI
46、 and GSAMI(collectively“UK legal entities”).Within GSAMI and GSI,we have concluded that only business conducted in 2022 within Public Markets Investing(under the purview of GSAMI),Private Markets Investing(under the purview of GSI),and Private Wealth Management(under the purview of GSI)are in the sc
47、ope of the FCA requirements.For full details of in-scope assets within these business lines,refer to“Appendix B:In-scope Asset&Wealth Management Assets”.11AWMs business activities and processes are largely global in nature,with considerable overlap between legal entities on products and strategies a
48、nd associated processes and governance,given that we serve clients in different regions and under different regulated investment vehicle regimes.As a result,certain sections of this report are written from a global AWM perspective(for example,the“Strategy”section),while other sections and details ar
49、e UK legal entity-specific where appropriate(or required by the FCA guidance),and are highlighted as such.In particular,the“Governance”and“Metrics and Targets”sections focus on the two UK legal entities.This entity-level TCFD report is separate from any on-demand TCFD product reports developed by AW
50、M in accordance with the ESG Sourcebook.When appropriate,this report leverages and references information from these TCFD product reports.12 However,this report focuses on climate activities at the GSI and GSAMI entity level,rather than at the product level.This report is also separate from The Gold
51、man Sachs 2021 TCFD Report,which was published in December 2021 and covers all the business activities and segments within Goldman Sachs,including AWM.13 This AWM UK TCFD 2022 Report focuses exclusively on AWMs activities in the UK legal entities,but refers back to Goldman Sachs climate activities a
52、nd other firmwide climate and sustainability reports,where relevant.Additionally,this report focuses solely on AWMs investment activities in-scope for the GSI and GSAMI legal entities.For details related to GSIs operations,including carbon,energy,and business travel consumption and reporting,refer t
53、o the GSI 2022 Annual Report.14 For details on Goldman Sachs firmwide climate-related operational goals and commitments,see the Goldman Sachs 2022 Sustainability Report.Note that all data and metrics are as of 31 December 2022,and unless stated otherwise,the information provided in this report relat
54、es to the 2022 calendar year.Note that all references to figures in dollars($)are in USD.GSIGSI is a subsidiary of Goldman Sachs and delivers a broad range of financial services to clients located worldwide.GSI also operates a number of branches and representative offices across Europe,the Middle Ea
55、st,and Africa(“EMEA”),providing financial services to clients in those regions.The company generates revenue from the following business activities:Investment Banking;Fixed Income,Currency,and Commodities(“FICC”);Equities;and Asset Management(primarily focused on private markets investments)and Priv
56、ate Wealth Management.GSAMI is a subsidiary of Goldman Sachs and an asset management company principally operating in the EMEA region.In 2022,GSAMIs asset management activities primarily focused on public markets investments.GSAMI11 Following an internal reorganisation on 1 April 2023,the UK Private
57、 Markets Investing business now sits within GSAMI.However,during the reporting period covered by this report(2022 calendar year)the business was part of GSI.12 Note:product-level reporting may also draw from and reference entity-level reporting where applicable.13 Note:Goldman Sachs 2021 TCFD was pr
58、oduced voluntarily and is not currently addressing any regulatory requirement.14 GSAMI also produces an annual report with details on its operations.However,Goldman Sachs International only publishes an annual report if the entity has listed debt or significant public interest.GSAMI does not meet th
59、is criterion,and therefore the report is not publicly available.AWM TCFD REPORT 20228 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesCOMMENTARY ON ASSET&WEALTH MANAGEMENTS INAUGURAL TCFD REPORTThis report represents the first report specific t
60、o Asset&Wealth Management in line with the TCFD Recommendations.15 The report focuses primarily on the progress we have made in recent years to support our clients with their climate-related investment objectives through the development of climate-related products and services,and innovative climate
61、 tools and analytics.This report reflects the latest position as of 31 December 2022,with the exception of the overarching climate strategy framework and key components within the“Strategy”section.The framework was further refined in 2023 by a cross-business line group of stakeholders within AWM,ref
62、lecting the closer integration of AWM business lines following the formation of AWM in 2022(specific details may change in future TCFD reports).The integration of our overarching climate strategy and climate-related risk management practices within AWM is ongoing,and is more advanced in certain busi
63、ness strategies and products relative to others.The climate strategy described in the“Strategy”section is predominantly applicable to Public Markets Investing and Private Markets Investing,though Private Wealth Management leverages many of their products and solutions,and therefore benefits from the
64、ir strategy when it offers its clients those products and solutions.The majority of our funds and strategies do not have specifically integrated climate considerations;however,across AWM,we have dedicated climate strategies and solutions in which climate considerations are embedded in the investment
65、 process and risk management practices.We seek to embed climate considerations more comprehensively,and systematically across some aspects of our business in-line with client preferences;we are making progress towards this,as described later in this report,yet significant work remains.Throughout the
66、 report,we aim to identify where specific climate-related activities are being performed for a subset of investment products.Across all AWM business lines within this report,we have distinguished between existing climate-related activities and future initiatives,focusing on existing activities.There
67、 is a broader suite of climate-related initiatives in earlier stages of progress,which we anticipate featuring in future TCFD reports.Additionally,this report focuses on climate-related considerations per the TCFD Recommendations.However,within AWM,we consider climate-related risks and opportunities
68、,typically alongside other related sustainability risks and opportunities,where financially material.As such,this report includes areas where our business lines and units consider climate and sustainability factors alongside each other.As noted previously,each of the Public Markets Investing,Private
69、 Markets Investing,and Private Wealth Management businesses covered in this report may take a different approach to managing climate-related risks and opportunities,considering factors such as investment size,climate exposures,asset classes,client preferences,and business strategy.Within each busine
70、ss line,individual investment teams may also adopt different approaches to managing climate-related risks and opportunities,as appropriate.15 www.fsb-tcfd.org/recommendations.AWM TCFD REPORT 20229 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendice
71、sThe TCFD Recommendations,published in 2017 and updated in 2021,are structured around four thematic areas(“pillars”)that are core elements of how organisations operate:Governance;Strategy;Risk Management;and Metrics and Targets.Each of these pillars has a series of key climate-related financial disc
72、losure requirements Figure 2:TCFD Recommendations and Supporting Recommended Disclosures16SUMMARY OF TCFD RECOMMENDATIONSGOVERNANCESTRATEGYRISK MANAGEMENTMETRICS AND TARGETS A)Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy an
73、d risk management process.A)Describe the organizations processes for identifying and assessing climate-related risks.A)Describe the climate-related risks and opportunities the organization has identified over the short,medium,and long-term.A)Describe the boards oversight of climate-related risks and
74、 opportunities.B)Disclose Scope 1,Scope 2,and,if appropriate,Scope 3 greenhouse gas(“GHG”)emissions,and the related risks.B)Describe the organizations processes for managing climate-related risks.B)Describe the impact of climate-related risks and opportunities on the organizations businesses,strateg
75、y,and financial planning.B)Describe managements role in assessing and managing climate-related risks and opportunities.C)Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.C)Describe how processes for identifying,assessing,
76、and managing climate-related risks are integrated into the organizations overall risk management.C)Describe the resilience of the organization strategy,taking into consideration different climate-related scenarios,including a 2C or lower scenario.Disclose the organizations governance around climate-
77、related risks and opportunities.Disclose the actual and potential impacts of climate-related risks and opportunities on the organizations businesses,strategy,and financial planning where such information is financially material.Disclose how the organization identifies,assesses,and manages climate-re
78、lated risks.Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is financially material.RECOMMENDED DISCLOSURESRECOMMENDED DISCLOSURESRECOMMENDED DISCLOSURESRECOMMENDED DISCLOSURES(referred to as recommended disclosures)w
79、hich provide investors and others with information to help understand how reporting organisations assess climate-related issues.These pillars and recommended disclosures are summarised below in Figure 2.16 Source:TCFD“Implementing the Recommendations of the Task Force on Climate-Related Financial Di
80、sclosures”,Figure 6,October 2021.AWM TCFD REPORT 202210 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesIn evaluating climate-related risks and opportunities,we use definitions and methodologies consistent with the principles of TCFD.These risk
81、 definitions are incorporated into the Goldman Sachs comprehensive firmwide risk taxonomy,which includes both financial and non-financial risks to the firm.DEFINITION OF CLIMATE-RELATED RISKSTRANSITION RISK is the risk that asset values may decline because of changes in climate policies,or changes i
82、n the underlying economy due to decarbonisation.These risks emerge from policy,legal,technology,and market changes as the economy shifts towards using less carbon.PHYSICAL RISK is the risk to properties,collateral,or investments due to specific climate-related weather events and longer-term shifts i
83、n the climate.Physical risk has the potential to reduce the financial value of assets.Risks related to the physical impacts of climate change include acute risks and chronic risks.AWM TCFD REPORT 202211 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsApp
84、endicesCOMPLIANCE STATEMENTSAs set out above,this report covers the in-scope businesses of both GSI and GSAMI,as explained in“Scope of Report”.In accordance with the FCAs ESG Sourcebook,senior management for GSI and GSAMI confirms,on behalf of the respective UK legal entities,that the information pr
85、ovided in this report in relation to GSI(Private Wealth Management and Private Markets Investing businesses)and GSAMI(Public Markets Investing business),as relevant,complies with the requirements set out in chapter 2 of the ESG Sourcebook.Fadi Abuali Chief Executive Officer of Goldman Sachs Asset Ma
86、nagement InternationalJim Garman Global Co-Head of Real Estate and Head of EMEA Alternatives within Goldman Sachs Asset ManagementStefan Bollinger Co-Head of Private Wealth Management for EMEAChristopher French Co-Head of Private Wealth Management for EMEAAWM TCFD REPORT 202212 Introduction|Introduc
87、tionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesACCELERATING TRANSITIONTASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES REPORT 2021Navigating ComplexityA Client-Centric Approach toSustainabilityGoldman Sachs 2022 Sustainability ReportGoldman Sachs 2021 TCFD Repo
88、rt:Accelerating TransitionThe Goldman Sachs 2021 TCFD Report outlines how Goldman Sachs is leveraging the capabilities across the firm to help advance its climate transition goals.The report details the firms strategy and approach to climate-related risks and opportunities,and how it integrates clim
89、ate across the firms business and risk practices.17Goldman Sachs 2022 Sustainability Report:Navigating ComplexityThe Goldman Sachs 2022 Sustainability Report focuses on how Goldman Sachs is working with clients to help them achieve their sustainability objectives.The report details the role the firm
90、 takes in aiming to meet the increasing demand for sustainable finance advice,tools,and solutions,and helps us inform the market and develop new solutions to better support the firms clients.OTHER GOLDMAN SACHS CLIMATE-AND SUSTAINABILITY-RELATED REPORTSBelow we highlight select other Goldman Sachs c
91、limate-related reports.17 Note:this is a dated report reflecting 2021 specifically,and should not be considered up-to-date.AWM TCFD REPORT 202213 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesOTHER PUBLIC MARKETS INVESTING CONSIDERATIONS As p
92、art of the investment process,Public Markets Investing may integrate ESG factors alongside traditional factors.The identification of a risk related to an ESG factor will not necessarily exclude a particular investment that,in the view of Public Markets Investing,is otherwise suitable and attractivel
93、y priced for investment,and Public Markets Investing may invest in an issuer without integrating ESG factors or considerations into the investment process.Moreover,ESG information,whether from an external and/or internal source,is,by nature and in many instances,based on a qualitative and subjective
94、 assessment.An element of subjectivity and discretion is therefore inherent to the interpretation and use of ESG data.The relevance and weightings of specific ESG factors to,or within the investment process vary across asset classes,sectors,and,strategies and no one factor or consideration is determ
95、inative.Public Markets Investing in its sole discretion and without notice may periodically update or change the process for conducting its ESG assessments and implementation of its ESG views in portfolios,including the format and content of such analysis,and the tools and/or data used to perform su
96、ch analysis.Accordingly,the type of assessments described here may not be performed for every portfolio holding.The process for conducting ESG assessments and implementation of ESG views in portfolios,including the format and content of such analysis and the tools and/or data used to perform such an
97、alysis,may also vary among portfolio management teams.AWM TCFD REPORT 202214 Introduction|IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices02SectionEXECUTIVE SUMMARY15 AWM TCFD REPORT 2022Executive Summary|ASSET&WEALTH MANAGEMENT:OUR CLIMATE STRATEGYWithin A
98、sset&Wealth Management,our aim is to achieve long-term,risk-adjusted returns for our clients.18 Given the impact of the climate transition across sectors,geographies,and markets,we believe that developing a strategy for managing climate-related risks and opportunities(i.e.,a“climate strategy”)is imp
99、ortant for serving our clients preferences and delivering risk-adjusted returns.The foundation of our climate strategy is a powerful platform that allows our diverse and global client base to optimise their unique climate preferences and investment objectives.We combine breadth,across public and pri
100、vate markets,proprietary and third-party products,portfolio strategy and implementation,and depth,with specialist sustainable investing teams and strategies.This allows us to unlock potential value for our clients by enabling us to manage climate-related risks,19 opportunities,and impact together.Fo
101、r further details on our climate strategy across AWM,see the“Strategy”section of this report.Governance,risk management,and the use of metrics are also critical to operationalising,measuring,and managing our climate strategy.In this report,we describe how AWM incorporates climate into key governance
102、 structures,risk management processes,and specific metrics in line with TCFD guidance,where financially material.18 There is no guarantee that objectives will be met.19 Asset&Wealth Management leverages the resources of Goldman Sachs&Co.LLC subject to legal,internal,and regulatory restrictions.For a
103、dditional details on Goldman Sachs capabilities and approach to climate,refer to the Goldman Sachs 2021 TCFD Report and Goldman Sachs 2022 Sustainability Report.GOVERNANCEOur board-and management-level governance structures and oversight bodies incorporate climate considerations as part of their ove
104、rsight responsibilities(see the“Governance”section of this report for further details).RISK MANAGEMENTOur climate-related risk management approach aims to assess and manage the risks posed by climate change to our business and seeks to integrate climate considerations into risk management practices(
105、see the“Risk Management”section of this report for further details).METRICS AND TARGETSWe have produced climate-related metrics across a portion of our investment products and strategies in AWM,including financed greenhouse gas emissions metrics at the business line-level for Public Markets Investin
106、g,Private Markets Investing,and Private Wealth Management(see the“Metrics and Targets”section of this report for further details).We have not set AWM-specific GHG emissions reduction targets,but we are assessing potential target-setting approaches.16 Executive Summary|AWM TCFD REPORT 2022Introductio
107、nExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesIn recent years,Asset&Wealth Management has continued supporting the climate transition.In particular,we have continued to develop our climate products and solutions for clients,climate resources and tools,and our effort
108、s to engage our portfolio companies on climate issues.RECENT HIGHLIGHTS17 AWM TCFD REPORT 2022Executive Summary|RECENT HIGHLIGHTSCLIMATE PRODUCTS AND SOLUTIONSPublic Markets Investing continues to build out its suite of products and solutions to help clients capitalise on the potential opportunities
109、 presented by the climate transition.In 2021,Public Markets Investing and Bloomberg jointly developed and launched the Bloomberg Goldman Sachs Global Clean Energy Index.This index was developed using a proprietary,data-driven approach that identifies and selects active and impactful portfolio compan
110、ies based on an assessment of these companies value attributable to their activities across the clean energy themes of wind energy,energy storage,clean power,networks,digitalisation,bio-energy,solar energy,and hydrogen energy.As part of the acquisition of GSAM B.V.in April 2022,Public Markets Invest
111、ing acquired a dedicated Green,Social,and Impact Bond team,as well as a longstanding proprietary Green Bonds strategy.As the integration of GSAM B.V.continues,Public Markets Investing is seeking to deepen its approach to sustainable investing and identify areas to scale climate-focused products and
112、strategies.Public Markets Investing continues to enhance the Global Environmental Impact Equity Strategy,now in its third year,which provides investors an attractive solution to drive potential investment returns and environmental impact.Private Markets Investing continues to build out its climate a
113、nd environmental impact solutions through the Horizon platform.Launched in 2022,Private Markets Investing invests through the Horizon Environment&Climate Solutions(“HECS”)strategy which targets five themes that underpin Goldman Sachs approach to address environmental impact and advance the climate t
114、ransition:clean energy,sustainable transportation,waste and materials,sustainable food and agriculture,and ecosystem services.18 Executive Summary|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesRECENT HIGHLIGHTSCLIMATE RESOURCES AND TOO
115、LSIn 2022,we expanded our internal climate resources within AWM.With the addition of GSAM B.V.(formerly known as NN IP)to the Asset Management platform in April 2022,Public Markets Investing has benefitted from the combined climate-related expertise and capabilities of both companies.As part of the
116、acquisition,Public Markets Investing has integrated more than 65 climate-and sustainability-focused professionals across various geographies and teams.In Private Markets Investing,climate-and sustainability-focused resources were expanded by adding ESG business leads for most investment teams and by
117、 hiring a head of Climate Strategy for Private Markets Investing,who commenced the role in 2023.We also expanded our efforts to enhance climate education and awareness across various investment teams,clients,and portfolio companies.Through its 2022 Sustainability and Impact webinar series,Public Mar
118、kets Investing provided its clients20 with insights and education on important climate and sustainability topics,including green capital expenditure,battery storage,sustainable debt market trends,and climate-related impacts on socially vulnerable communities.Public Markets Investing holds a regular
119、investor meeting series called The Forum,in which leading experts,both internal and external,meet to discuss the global trends and events that will shape its investments.ESG and climate are frequently discussed;in 2022,topics included quantifying improvement in corporate GHG emissions,the investment
120、 implications of the increased focus on energy security,resilience,diversification in light of geopolitical issues,and the implications of the US Inflation Reduction Act across sectors.The Forum helps portfolio managers and research analysts keep up with the latest developments in a rapidly evolving
121、 space and helps to inform investment processes.In Private Markets Investing,its internal 2022 Strategic Planning series included a sustainable investing-related strategy workshop for senior leadership,and dedicated training sessions for select working groups across business units on climate-related
122、 risk assessments and decarbonisation initiatives.In 2022,Private Wealth Management published a Carbon-Aware Portfolio Management framework for its clients.This framework supports clients who want to understand the financed GHG emissions associated with their portfolios,and who want to reduce the GH
123、G emissions exposure of their current holdings,invest in decarbonisation solutions,and navigate carbon offset markets to achieve a more carbon-conscious portfolio that is specific to the financial needs and sustainability goals they want to achieve.Finally,we built out select climate tools to suppor
124、t our clients and portfolio managers.Private Wealth Management has developed a public markets diagnostic tool to help clients articulate,refine,and work towards their long-term sustainable investing goals.Clients can leverage certain climate transition and inclusive growth metrics to assist with ris
125、k management,transparency,and engagement on climate and other sustainability objectives.The tool helps provide a deeper dive into a portfolios financed GHG emissions,exposure to specific business activities,as well as tracks a portfolios alignment with the UN Sustainable Development Goals(“SDGs”).Pu
126、blic Markets has been developing a Paris Alignment tool for certain tailored client solutions that combines quantitative and qualitative information on company climate disclosures,strategy,and target-setting to provide a forward-looking categorisation of an issuers alignment with the aims of the 201
127、5 Paris Agreement.20 Note,these sessions are also made available to Private Wealth Management clients.19 Executive Summary|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices In 2022,Private Markets Investing undertook a selection process t
128、o identify and contract with a preferred third-party vendor to deliver GHG emissions accounting services to select portfolio companies in equity investing portfolios within Private Equity,Infrastructure,and the Sustainable Investing Group(“SIG”).Select portfolio companies are able to track GHG emiss
129、ions and receive recommended decarbonisation opportunities.Private Markets Investing also conducted its second full year of ESG data collection in 2022,with more than 70 portfolio companies in-scope across Private Equity,Growth Equity,Infrastructure,and SIG.As part of this process,the Sustainability
130、&Impact team provided guidance and trainings to portfolio companies,including suggested areas for improvement on disclosure and relative data maturity compared to peers.Real Estate also conducted an ESG data collection process and engaged,where considered financially material,on assets to discuss re
131、sults and identify potential opportunities,including on climate-related topics.RECENT HIGHLIGHTSENGAGING WITH PORTFOLIO COMPANIESWithin Public Markets Investing and Private Markets Investing,we have enhanced our efforts and approaches to engaging with our portfolio companies on financially material
132、climate-related risks and opportunities.21 Given the differing nature of investments between Public Markets Investing and Private Markets Investing(such as ownership,influence,investment horizon),our approach to engagement differs materially across these business lines and our strategies.In 2022,the
133、 Public Markets Investing Global Stewardship Team,in partnership with the Public Markets Investing Fixed Income and Fundamental Equity investment teams,enhanced its Climate Engagement Framework to continue to drive positive outcomes with select portfolio companies in line with Public Markets Investi
134、ngs views on best practices of issuers climate-related disclosures.Additionally,for the first time in 2022,the Public Markets Investing Global Stewardship Team expanded their approach beyond carbon and developed a framework for engaging on biodiversity.The team launched a targeted programme to engag
135、e on biodiversity loss with a select group of portfolio companies,focusing on increasing disclosure around packaging and waste,improving board and management oversight of these issues,and encouraging thoughtful target setting and accountability.21 The engagement highlights presented here outline exa
136、mples of Goldman Sachs initiatives.There is no assurance that Goldman Sachs engagement directly caused the outcome described herein.portfolio companies in scope for ESG data collection across Private Equity,Growth Equity,Infrastructure,and Sustainable Investing Group70+20 Executive Summary|AWM TCFD
137、REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices03SectionGOVERNANCE21 AWM TCFD REPORT 2022Governance|We are continuing to establish an effective and resilient governance and risk environment for climate-and sustainability-related issues.To achiev
138、e this,alongside beginning to embed climate-related risks into our risk management practices,we continue to integrate oversight of climate-related risks and opportunities into governance structures at multiple levels of the organisation.This includes governance responsibilities within our boards,our
139、 management teams,and specific functional groups,at a Goldman Sachs,business segment,business line,and legal entity level.Our governance continues to evolve in response to increasing demand for reporting and transparency from key stakeholders and regulators.22 AWM TCFD REPORT 2022Governance|The GSAM
140、I and GSI Board are responsible for setting the strategic direction of their respective entities,which are aligned to the strategic direction set by the Goldman Sachs Board.The directors who serve from time to time on the Goldman Sachs Board may also serve on subsidiary boards,including currently th
141、e GSI Board.Climate-related considerations may be raised directly to the GSAMI Board and/or GSI Board,as appropriate.22 Effective 1 April 2023,following the transfer of the relevant business from GSI to GSAMI,oversight of Private Markets Investing has been transferred to the GSAMI Board from the GSI
142、 Board.Future TCFD reports will reflect this change in governance.In this section of the report,we describe how specific boards,management committees,and functional groups combine to provide governance of climate-and sustainability-related issues for the Asset&Wealth Management activities within GSI
143、 and GSAMI.In addition,we provide detail on Goldman Sachs-level oversight groups that play a critical role in overseeing Goldman Sachs-level climate-related risks and opportunities more generally.BOARD OVERSIGHTGSAMI BOARDThe Goldman Sachs Asset Management International Board of Directors(“GSAMI Boa
144、rd”)is responsible for oversight of the businesses within GSAMI(which includes Public Markets Investing).GSI BOARDThe Goldman Sachs International Board of Directors(“GSI Board”)is responsible for the oversight of businesses within GSI(which includes both client assets and the firms on-balance sheet
145、alternative assets arising from Private Markets Investing and the business activities within Private Wealth Management in AWM).22There are two distinct Boards with oversight responsibilities for AWM businesses in the UK:23 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrateg
146、yRisk ManagementMetrics and TargetsAppendicesGSAMI BOARD OVERSIGHT BODIESGSI BOARD OVERSIGHT BODIESGovernance BodyClimate-Related ResponsibilitiesGSI BoardThe GSI Board is responsible for oversight of climate strategy,including the management of climate-related risks and opportunities,and oversight
147、of progress against any future climate-related goals and targets,where applicable,to the extent that this relates to GSI activities.The frequency of climate-related discussions is variable and depends on the frequency with which these discussions are held at the GSI Board Risk and Audit Committees.T
148、hese committees discuss climate-related topics in greater detail and present summarised findings at the GSI Board-level.Additionally,in 2022,the GSI Board received periodic updates on the strategy and performance of its business lines(inclusive of Private Wealth Management and Private Markets Invest
149、ing)which included climate.GSI Board Risk CommitteeThe GSI Board Risk Committee reviews the effectiveness of the risk management frameworks with reference to climate-related risks,considers GSIs exposure in managing climate-related risks,and escalates climate-related risks issues to the GSI Board,as
150、 required.On several occasions in 2022,the GSI Board Risk Committee discussed climate-related topics with regular briefings and as a key focus topic.GSI Board Audit CommitteeThe GSI Board Audit Committee is responsible for advising and assisting the GSI Board by overseeing,in particular,the integrit
151、y of GSIs systems,controls,accounting,financial statements,and financial reporting processes.As part of this,in 2022,this committee was briefed on climate-related topics in relation to these systems and controls.Governance BodyClimate-Related ResponsibilitiesGSAMI BoardThe GSAMI Board is responsible
152、 for the oversight of climate strategy,including the management of climate-related risks and opportunities,and oversight of progress against any future climate-related goals and targets,where applicable,to the extent that this relates to GSAMI activities.The GSAMI Board has implemented an annual age
153、nda item on climate-related risks where they receive an update on the metrics related to TCFD disclosure and contextual information on the relative climate considerations for Public Markets Investing compared to other businesses and peers.On an ad-hoc basis,climate-related topics may be discussed mo
154、re frequently.GSAMI Board Risk CommitteeThe GSAMI Board Risk Committee reviews the effectiveness of the risk management frameworks with reference to climate-related risks,considers GSAMIs exposure in managing climate-related risks,and escalates climate-related risk issues to the GSAMI Board,as requi
155、red.In 2022,there was no standardised frequency for climate-related discussions.In the future,this committee expects to have a regular agenda item on climate-related risks and climate-related risks management frameworks.24 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrateg
156、yRisk ManagementMetrics and TargetsAppendicesIn addition to the GSAMI and GSI Boards,the Goldman Sachs Board and various firmwide committees play a critical role in overseeing Goldman Sachs-level climate-related risks and opportunities.The Goldman Sachs Board oversight is described below:GOLDMAN SAC
157、HS BOARD OF DIRECTORS(“THE GOLDMAN SACHS BOARD”)and its committees are responsible for overseeing the management of the firms most significant risks,including climate-related risks,and focus on reputational risk and long-term operations.Given the interdisciplinary nature of the oversight of sustaina
158、bility and climate-related risks,the Goldman Sachs Board carries out its oversight of these matters directly,at the full Board level,as well as through its Public Responsibilities and Risk Committees.This may include periodic updates on the firms sustainability strategy,including the firms approach,
159、objectives,and progress to date,discussions regarding the climate models the firm utilises to assess physical and transition risks,and reviews of our sustainability and climate-related reporting.THE PUBLIC RESPONSIBILITIES COMMITTEE (“THE PRC”)of the Goldman Sachs Board assists the Goldman Sachs Boa
160、rd in its oversight of our firmwide sustainability strategy and sustainability issues affecting the firm,including with respect to climate change.As part of its oversight,the PRC receives periodic updates on the firms sustainability strategy and reporting,and also periodically reviews the firms gove
161、rnance and related policies and processes for sustainability and climate change-related issues.THE RISK COMMITTEE OF THE GOLDMAN SACHS BOARD(“THE RISK COMMITTEE”)oversees firmwide financial and non-financial risks.This includes the firms overall risk-taking tolerance and management of financial and
162、non-financial risks,including climate-related risk.In this respect,the Risk Committee provides oversight of the firms Risk Appetite Statement(“RAS”),which describes the levels and types of risks the firm is willing to accept or avoid,to achieve the objectives in our strategic business plan,while rem
163、aining in compliance with regulatory requirements,including climate-related guidance.As part of its oversight,the Risk Committee of the Board receives updates on our risk management approach to climate-related risk,including our approaches towards stress testing and integration into existing risk ma
164、nagement processes.25 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesAdditionally,there is overlap in the membership of management and board bodies.The CEO of GSI is on the Firmwide Management Committee and is the Chair of th
165、e European Management Committee,while the CEO of GSAMI is also a member of the European Management Committee.Both committees are involved in the implementation of the strategic direction,including climate and sustainability strategy,set by the GSAMI and GSI board,in alignment with the strategic dire
166、ction set by the Goldman Sachs Board.We have embedded oversight of climate-related risks and opportunities into our management governance structures across Asset&Wealth Management.Dedicated forums oversee climate-related activities that sit within GSAMI and GSI.MANAGEMENT OVERSIGHTFigure 3 provides
167、an overview of the governance bodies with climate-related oversight responsibilities.We have noted where bodies have oversight over specific business lines,and which were newly formed in 2023.As the AWM segment was only recently formed,we continue to evolve our combined governance structures to defi
168、ne and align the appropriate oversight and escalation protocols.Figure 3:Asset&Wealth Management Sustainable Investing Governance BodiesPrivate Risk CouncilSustainable Investing Leadership Council Investment CommitteesProxy Voting Council Asset Management Public Risk Working GroupPRIVATESustainabili
169、tyLeadership CouncilWEALTHWealth Sustainable Solutions Council PUBLICSustainable Investing Oversight Group Asset&Wealth Management Sustainable Investing Executive Group*Inclusion of Private Wealth Management in this body has begun in 2023 Indicates body was formed in 2023Public Markets InvestingPriv
170、ate Markets InvestingPrivate Wealth ManagementAcross Asset&Wealth ManagementIndicates that body discusses sustainability-related topics,but is not a sustainability-specific bodyShows escalation path,the arrow points to the body where certain decisions are escalated to for final decision and/or appro
171、valsShows alignment with,or review by the respective bodies in order to make decisions and/or approvals within each body26 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesASSET&WEALTH MANAGEMENT MANAGEMENT OVERSIGHT BODIESGove
172、rnance BodyOverviewEscalation PathAsset&Wealth Management Sustainable Investing Executive GroupThe AWM Sustainable Investing Executive Group serves as the ultimate arbiter of climate,sustainability,and impact decisions for AWM.The AWM Sustainable Investing Executive Group is responsible for executin
173、g on climate strategy;ensuring AWM is meeting firm,client,and regulatory expectations;ensuring consistency among the business lines within AWM and Goldman Sachs;resolving conflicts if they arise from other sustainable investing governing bodies;and managing climate-related risks.This Group meets eve
174、ry other month,or more frequently on an ad-hoc basis,as needed.23Relevant climate-related issues may be escalated to Goldman Sachs Executive Office.24 Additionally,the Global Chief Investment Officer for AWM is a member of this Group and may escalate climate-related issues to other management commit
175、tees or oversight bodies,as appropriate.2523 The Asset&Wealth Management Sustainable Investing Executive Group cannot override legal entity governance as a UK regulatory matter.24 The Goldman Sachs Executive Office plays an integral role in setting and advancing Goldman Sachs strategy and in support
176、ing and enhancing the firms distinctive culture.The Executive Office contains the Sustainable Finance Group,which serves as the centralised group responsible for driving climate strategy efforts across Goldman Sachs.The Executive Office sits above the GSI and GSAMI entity level and includes personne
177、l who form part of the Goldman Sachs Board.25 In 2022,there were no occurrences of climate-related issues being escalated.However,there is an established escalation process for any future climate-related issues.27 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk Man
178、agementMetrics and TargetsAppendicesPUBLIC MARKETS INVESTING MANAGEMENT OVERSIGHT BODIESGovernance BodyOverviewEscalation PathSustainable Investing Oversight Group26The Sustainable Investing Oversight Group oversees sustainability and impact decisions for Public Markets Investing across risk and bus
179、iness issues,such as climate-related topics.This includes final approval on material changes to sustainable investing methodologies and frameworks,oversight on sustainable investing commitments,external statements on sustainable investing,stewardship materials,and the strategic sustainable investing
180、 direction for Public Markets Investing.This multidisciplinary body comprises representatives from Risk,Legal,Compliance,ESG Product Groups,Investment Area Chief Operating Officers(“COO”),Sustainable Investing and Innovation Platform(“SIIP”),Client Relations,Imprint,and Marketing.This Group meets qu
181、arterly,or more frequently on an ad-hoc basis,as needed.Climate-related issues are escalated to the AWM Sustainable Investing Executive Group,when deemed necessary.Sustainable Investing Leadership CouncilThe Sustainable Investing Leadership Council oversees sustainable investing-related topics withi
182、n investment portfolios.This multidisciplinary body comprises ESG Product Group leads,Investment Area leaders,ESG/sustainable investing experts,and representatives from SIIP.This governance body is an alignment and sustainable investing expertise exchange rather than a decisioning body;it escalates
183、decisions to other cross-AWM and business line-specific bodies.This Council meets monthly.Decisions may be escalated to the Sustainable Investing Oversight Group.Proxy Voting CouncilThe Proxy Voting Council oversees the Public Markets Investing Global Proxy Voting Policy,including sustainable invest
184、ing-related sections.This multidisciplinary body comprises representatives from the Global Stewardship Team,equity investment teams,Public Markets Investing Management,Legal,and Compliance.This Council meets quarterly,or more frequently,as needed.Informs the Sustainable Investing Oversight Group but
185、 does not escalate decisions.Asset Management Public Risk Working GroupThe Asset Management(“AM”)Public Risk Working Group assesses and proposes mitigation measures for risks related to business activities in Public Markets Investing.The AM Public Risk Working Group includes senior business leaders,
186、risk management,and other key stakeholders.Where appropriate,the risk function may recommend escalation of climate-related risks to the AM Public Risk Working Group.Potential climate-related risks identified at a fund or investment level are escalated to AM Risk Public Working Group with remedial ac
187、tions discussed and agreed,as appropriate.The AM Public Risk Working Group meets monthly.Climate-related issues may be escalated to the applicable Portfolio Management team,and/or the Sustainability Leadership Council,when deemed necessary.26 Note:this oversight body was formed in 2023.28 Governance
188、|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesPRIVATE MARKETS INVESTING MANAGEMENT OVERSIGHT BODIES Governance BodyOverviewEscalation PathSustainability Leadership CouncilThe Sustainability Leadership Council helps drive the climate s
189、trategy and key climate initiatives for Private Markets Investing,as part of the broader sustainability strategy.Members include the Global Head of Sustainability for Private Markets,Business Unit Leaders,COOs for each asset class,the Global Alternatives COO,the AWM Chief Risk Officer(“CRO”),Legal,a
190、nd Compliance.This Council meets every other month,or more frequently on an ad-hoc basis,as needed.Recommendations and areas requiring decisions from this group may be escalated to the AWM Sustainable Investing Executive Group,where alignment with other areas of AWM is required.Investment Committees
191、The six Investment Committees for Private Markets Investing include:1.the Private Equity Investment Committee;2.the Private Credit Investment Committee;3.the Growth Equity Investment Committee;4.the Real Estate Investment Committee;5.the Infrastructure Investment Committee;and6.the SIG Investment Co
192、mmittee.Each committee comprises a senior group of investors and individuals from the firms second line of defence.Potential climate-related risks are generally escalated to Investment Committees through the Investment Committee memo(see the“Manage and Mitigate Climate-Related Risks”section for more
193、 details).Additionally,where appropriate,the CRO may recommend escalation of climate-related investment-level risks to the Investment Committee.Committees meet as needed when a potential investment opportunity arises(typically weekly).Climate-related issues may be raised to the Sustainability Leader
194、ship Council and/or Risk Council(see below),when deemed necessary.Risk CouncilThe Risk Council assesses and proposes mitigation measures for risks related to business activities in Private Markets Investing.The Risk Council includes senior business leaders,risk management,and other key stakeholders.
195、Where appropriate,the risk function may recommend escalation of climate-related risks to the Risk Council.Potential climate-related risks identified at a fund or investment level are escalated to the Risk Council with remedial actions discussed and agreed,as appropriate.The Risk Council meets monthl
196、y.Climate-related issues may be escalated to the applicable Investment Committee and/or the Sustainability Leadership Council,when deemed necessary.29 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesPRIVATE WEALTH MANAGEMENT M
197、ANAGEMENT OVERSIGHT BODIES FIRMWIDE AND REGIONAL OVERSIGHT BODIESIn addition to AWM-specific oversight bodies,a number of firmwide and regional oversight bodies play a more general role in overseeing climate issues.The most important oversight bodies are described below:Governance BodyOverviewEscala
198、tion PathWealth Management Sustainable Solutions CouncilThe Wealth Management Sustainable Solutions Council supports the curation of climate and sustainability resources for the Wealth Management client franchise,as part of the broader sustainability strategy,and oversees climate-related issues for
199、Wealth Management.Climate-related issues may be escalated to the AWM Sustainable Investing Executive Group,when deemed necessary.The GSAMI Executive Risk Committee Assesses and manages climate-related risks(including physical and transition risk)and provides periodic updates to the GSAMI Board on cl
200、imate-related risk management through the CRO,who chairs the GSAMI Executive Risk Committee and reports to the GSAMI Board Risk Committee.The GSI Executive Risk Committee Oversees and monitors climate-related risks(including physical and transition risk),and provides periodic updates to the GSI Boar
201、d Risk Committee on climate-related risk management through the CRO,who co-chairs the GSI Executive Risk Committee and reports to the GSI Board Risk Committee.The Firmwide Climate Steering Group Our Firmwide Climate Steering Group provides oversight of key climate-related risks and opportunity decis
202、ions,reviews progress,and provides feedback on climate-related and environmental strategy,risk management,integration,and capabilities more broadly.27The Firmwide Enterprise Risk Committee(“ERC”)Oversees all of Goldman Sachs financial and non-financial risks,including climate-related risks.This comm
203、ittee,which reports to the Management Committee,is co-chaired by the Groups President,Chief Operating Officer(“COO”),and CRO.The European Management Committee(“EMC”)Oversees the activities of Goldman Sachs(inclusive of AWM)within Europe,the Middle East,and Africa.The EMC is accountable for business
204、management and key risks(including climate-related risks).27 For more information on firmwide targets,see The Goldman Sachs 2021 TCFD Report and The Goldman Sachs 2022 Sustainability Report.30 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and Ta
205、rgetsAppendicesIn addition to incorporating climate considerations into board and management governance structures,the firm has integrated climate considerations into how its businesses are strategically managed,and how commercial opportunities are identified.GroupOverviewSustainable Finance Group(“
206、SFG”)The Sustainable Finance Group serves as the centralised group in the Executive Office responsible for driving climate and sustainability strategy efforts across Goldman Sachs.This includes supporting commercial efforts alongside our firms business segments (e.g.,AWM),engagement with the firms s
207、takeholders on sustainable finance and sustainability-related policy and reporting,and oversight of firmwide transactional environmental and social risk management.Sustainable Asset Working Group(“SAWG”)The Sustainable Asset Working Group discusses,guides,and validates sustainable client offerings,a
208、nd attributions at the transaction and product level,as well as the methodology towards measuring Goldman Sachs firmwide$750 billion sustainable finance commitment.The target is built on commercial activity that aligns with the Sustainable Finance Framework.Product and Distribution Working Group(“PD
209、WG”)28The Product and Distribution Working Group reviews and approves product-specific sustainability-related requirements(inclusive of climate considerations,as appropriate)through a standardised template included in meeting materials.29BUSINESS AND FUNCTIONAL GROUPS OVERSIGHT28 PDWG is only applic
210、able to Public Markets Investing throughout 2022.Applicable to Public Markets Investing and Private Markets Investing from 2023.29 These products are also approved by the relevant Investment Committee for sustainability-related requirements.Business and Functional Groups with Climate-Related Respons
211、ibilities31 Governance|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesAdditionally,climate-related governance is embedded across roles within AWMs business lines and within other functional teams,as outlined below.Public Markets Investi
212、ng,Private Markets Investing,and Private Wealth Management convene to align on climate-and sustainability-related considerations.These groups are focused on aligning across key topics such as climate strategy,sustainable investing,ESG integration and regulation,innovation and research,stewardship,cl
213、ient strategy and engagement,and thought leadership and policy.PUBLIC MARKETS INVESTINGIn Public Markets Investing,sustainable investment professionals are supported by the centralised SIIP.There is emphasis on enhancing and developing sustainable investing data and tools,sustainable investing inter
214、nal education,providing sustainable investing strategic advice and analytics,and enhancing ESG integration(inclusive of climate)within investment strategies.Additionally,Public Markets Investing has appointed ESG business leads who are embedded within our asset classes:Equities,Fixed Income,Multi-As
215、set Solutions,and the External Investing Group(formerly known as the Alternative Investments&Manager Selection Group(“AIMS”).PRIVATE MARKETS INVESTINGIn Private Markets Investing,the Sustainability&Impact team leads the sustainability strategy for the business.Additionally,beginning in 2022 and cont
216、inuing through 2023,Private Markets Investing has established ESG business leads embedded in the Private Equity,Infrastructure,Private Credit,Real Estate,and SIG businesses.They are responsible for integrating and implementing,where applicable,sustainability best practices and climate strategy into
217、the investment process for their business unit.In 2023,these team members are supported by the Head of Climate Strategy in Private Markets Investing.These individuals work closely with investment teams to support the integration of climate-related tools and analytics,transition planning,and portfoli
218、o company and asset-level climate integration,along with sustainable investing product development.In Private Wealth Management,the Sustainable Solutions Group(“SSG”)was established in 2021 to support the development of our sustainability capabilities(including climate)for Private Wealth Management
219、clients.SSG advises the business on all matters related to sustainable portfolio solutions across clients multi-asset class portfolios.This team is both client-facing and strategic in nature,working with other groups across the firm to ensure the Private Wealth Management platform fully serves clien
220、ts needs.PRIVATE WEALTH MANAGEMENTThere are various other teams including Legal,Compliance,Risk,Controllers,and Corporate and Workplace Solutions involved in helping support the governance of climate-related risks and opportunities in AWM.32 Governance|AWM TCFD REPORT 2022IntroductionExecutive Summa
221、ryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices04SectionSTRATEGY33 AWM TCFD REPORT 2022Strategy|The level of integration of climate-related considerations into clients portfolios is dependent on the clients stated investment and climate objectives.30 Specific products and strategies
222、 for each asset class are implemented to optimise for the clients climate goals,based on each clients expressed interests.As such,the broad climate strategy outlined below may not apply across the entirety of AWM.This requires investment in climate-related data,tools,resources,and product developmen
223、t,all of which can factor into our business strategy and financial planning,where financially material.We continue to invest in climate-focused tools and data,and we have built out our sustainability-focused teams,developed a suite of climate-related products and solutions,and provided our portfolio
224、 30 It is also important to note that the availability of climate-related investment solutions varies across the Private Wealth Management business due to strategy minimums and suitability relative to the client size.31 The portfolio risk management process includes an effort to monitor and manage r
225、isk,but does not imply low risk.Given the nature of our diverse and global client base,AWM takes a client-centric,tailored approach to integrating each clients unique climate objectives into their portfolio(s).ASSET&WEALTH MANAGEMENT:OUR CLIMATE STRATEGYOur approach to sustainable investing aims to
226、manage and mitigate climate-related risks,31 while managing value creation opportunities for portfolio companies and client assets.In light of the scale of the global climate transition,managing climate-related risks and opportunities alongside other financial and non-financial factors is integral t
227、o serving our clients and their climate-related objectives.We leverage expertise and capabilities across the firm to uncover opportunities for our panies and clients with resources to help them manage climate-related risks and navigate the transition.This enables us to better understand the impact o
228、f climate-related risks and opportunities on our financial performance and position,and to assess potential adaptation and mitigation measures for the investments we manage.34 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesHelp
229、 portfolio companies and client assets navigate and beneft from the climate transitionManage and mitigate climate-related risksInvest in climate opportunitiesProvides capabilities toEnables us todecisions through actionable climate intelligenceEMPOWERthe full range of our resources to meet clients n
230、eedsMOBILISEpotential value through the management of climate-related risks,opportunities,and impactUNLOCKFigure 4:Our Climate Strategy Designed to Meet Clients Needs32 However,this entity-level report does not provide a comprehensive description of the climate-related impact for each product and in
231、vestment strategy in-scope for the AWM report.Details for individual products and investment strategies will be included in individual product-level reports that are made available to clients(on request).33 It is also important to note that the availability of climate-related investment solutions va
232、ries across the Private Wealth Management business due to strategy minimums and suitability relative to the client size.Our ability as an asset and wealth manager to effectively manage climate-related risks and capture opportunities has the potential to impact our reputation and assets under supervi
233、sion over time,both through direct valuation impacts,and through our ability to attract and retain client assets.We therefore seek to consider climate alongside other factors when developing our overall strategy.The following sections provide further detail on AWMs climate strategy across business l
234、ines.This includes how select investment strategies and products have incorporated climate-related considerations in response to the potential impacts from the transition to a lower-carbon economy(e.g.,Fixed Income within Public Markets Investing,certain Private Markets Investing strategies amongst
235、others.).32 Given the nature of its diverse and global client base,Private Wealth Management takes a client-centric,tailored approach that aims to integrate each clients climate objectives,if any,into their portfolio(s),and as such the level of integration is bespoke and commensurate with the client
236、s stated investment and climate objectives.33 Specific products and strategies for each asset class are implemented to optimise for the clients climate goals,based on each clients expressed interests.As such,the broad climate strategy outlined below does not apply across all portfolios or strategies
237、 managed or offered by Private Wealth Management,but only to certain products and strategies managed by Public Markets Investing and Private Markets Investing.35 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesEMPOWER DECISIONS
238、THROUGH ACTIONABLE CLIMATE INTELLIGENCEThe basis of our climate strategy is our climate-related insights,tools,and analytics from across Goldman Sachs.This provides us with a foundation of actionable information,which can be used in select investment products and strategies for understanding and mit
239、igating climate-related risks,supporting portfolio companies and client assets in the transition,identifying climate opportunities,and creating real world impact.UNLOCK POTENTIAL VALUE THROUGH THE MANAGEMENT OF CLIMATE-RELATED RISKS,OPPORTUNITIES,AND IMPACT34We seek to unlock potential value for our
240、 clients by embedding climate considerations in the investment lifecycles for select investment products and strategies,for example,by enhancing climate-related risk management,driving operational and strategic improvements in portfolio companies and client assets,and investing in thematic climate-r
241、elated growth opportunities.Manage and mitigate climate-related risksOur efforts to understand climate-related risks across the investment process help to unlock potential long-term returns for our clients.35 Our clients seek to manage climate-related risks,and they look to our capabilities to activ
242、ely manage and mitigate exposure,where appropriate.These capabilities include,for example,transition and physical risk screening tools,enhanced due diligence processes on climate-related risks,and strategic portfolio tilts to partly mitigate physical and transition risk exposure.Through these effort
243、s,we try to help clients make climate-related decisions,unlock potential value,and mobilise capital to deliver on their objectives.Help portfolio companies and client assets navigate and benefit from the climate transitionWe seek to support portfolio companies and client assets in navigating an acce
244、lerated climate transition.We look to support operational and strategic improvements within select portfolio companies,while engaging and stewarding these companies through changing economic and climate conditions.Our efforts focus on positive impacts,while also seeking to appropriately manage the l
245、ong-term risk-return outlook for our clients.Invest in climate opportunitiesWe have identified investment opportunities that enable the climate transition across regions and markets through our traditional,alternative,and climate-focused products.Our strategy also seeks to support climate transition
246、 through additional levers such as biodiversity and inclusive growth strategies.MOBILISE THE FULL RANGE OF OUR RESOURCES TO MEET CLIENTS NEEDSOur scale and approach to climate investing allows us to provide tailored investment solutions across public and private markets to satisfy our clients invest
247、ment and climate objectives.We deliver a range of products and capabilities across our platform to support clients with insights,analytics,and portfolio tools to co-create strategies to meet their specific needs.We aim to serve as the partner of choice for clients in navigating the climate transitio
248、n within their portfolios.36The global climate transition will require transformative change across sectors,regions,technologies,and communities.As we build on our insights,tools,and capabilities in these areas,we continue to refine and adapt the solutions we offer to our clients.In turn,as our unde
249、rstanding of climate-related risks and opportunities relevant to our business evolves,we continue to re-evaluate our commercial strategy,as appropriate.34 As noted in the“Commentary on Asset&Wealth Managements Inaugural TCFD Report”section,we seek to embed climate considerations more comprehensively
250、 and systematically across some aspects of our business in-line with client preference.35 The portfolio risk management process includes an effort to monitor and manage risk,but does not imply low risk.36 This material is provided for informational purposes only and should not be construed as invest
251、ment advice or an offer or solicitation to buy or sell securities.This material is not intended to be used as a general guide to investing,or as a source of any specific investment recommendations,and makes no implied or express recommendations concerning the manner in which any clients account shou
252、ld or would be handled,as appropriate investment strategies depend upon the clients investment objectives.36 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesEMPOWER DECISIONS THROUGH ACTIONABLE CLIMATE INTELLIGENCE AWM TCFD REPO
253、RT 202237 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesPublic Markets Investing has developed several tools to enhance the integration of climate-related factors into investment products and strategies.Fundamental Equity and
254、Fixed Income leverage a proprietary research tool to embed climate-and sustainability-related considerations,amongst other factors,into their research of portfolio companies and issuers within certain investment products.37 In addition,Public Markets Investing investment teams leverage insights from
255、 stewardship activities with portfolio companies(see the“Help Portfolio Companies and Client Assets Navigate and Benefit from the Climate Transition”section for further details).Quantitative Investment Strategies(“QIS”)also leverages data-driven techniques within certain investment products and stra
256、tegies as further described in the“Manage and Mitigate Climate-Related Risks”section.Further,Multi-Asset Solutions(“MAS”),through allocations in their managed portfolios to the Fundamental Equity,Fixed Income,and/or QIS strategies,are able to integrate these factors and processes into select multi-a
257、sset portfolios.PUBLIC MARKETS INVESTING37 As part of the investment process,Public Markets Investing may integrate ESG factors alongside traditional factors.The identification of a risk related to an ESG factor will not necessarily exclude a particular investment that,in the view of Public Markets
258、Investing,is otherwise suitable and attractively priced for investment,and Public Markets Investing may invest in an issuer without integrating ESG factors or considerations into the investment process.Moreover,ESG information,whether from an external and/or internal source,is,by nature and in many
259、instances,based on a qualitative and subjective assessment.An element of subjectivity and discretion is therefore inherent to the interpretation and use of ESG data.The relevance and weightings of specific ESG factors to or within the investment process vary across asset classes,sectors,and strategi
260、es,and no one factor or consideration is determinative.Public Markets Investing in its sole discretion and without notice may periodically update or change the process for conducting its ESG assessments and implementation of its ESG views in portfolios,including the format and content of such analys
261、is and the tools and/or data used to perform such analysis.Accordingly,the type of assessments depicted here may not be performed for every portfolio holding.The process for conducting ESG assessments and implementation of ESG views in portfolios,including the format and content of such analysis and
262、 the tools and/or data used to perform such analysis,may also vary among portfolio management teams.In addition to monitoring environmental practice through a risk lens,Public Markets Investing seeks to capture potential upside by encouraging portfolio holdings to disclose their sound business pract
263、ices,so they can be incorporated into market valuations.This process involves close collaboration with the Public Markets Investing Global Stewardship Team(see the“Help Portfolio Companies and Client Assets Navigate and Benefit from the Climate Transition”section for more details).38 Strategy|AWM TC
264、FD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices38 Source:Public Markets Investing.As of February 2023.For illustrative purposes only.Public Markets Investing in its sole discretion and without notice may periodically update or change the proc
265、ess for conducting its ESG assessments and implementation of its ESG views in portfolios,including the format and content of such analysis and the tools and/or data used to perform such analysis.Accordingly,the type of assessment depicted here may not be performed for every portfolio holding.No one
266、factor or consideration is determinative in the fundamental research and asset selection process.Public Markets Investing may invest in a security prior to completion of the ESG scorecard.Instances in which ESG scorecards may not be completed for a specific security prior to investment include but a
267、re not limited to IPOs,in-kind transfers,corporate actions,and/or certain short-term holdings.Research analysts in Fundamental Equity and Fixed Income leverage a proprietary tool,Fluent,to conduct climate-and sustainability-related assessments on portfolio companies and issuers.Fluent provides a cen
268、tralised repository of externally and internally generated research,storing climate-related metrics in themes such as climate change and energy,biodiversity and habitat,air quality,and water scarcity,that may inform investment decision-making.Research can be stored and retrieved in a variety of ways
269、,including by ticker symbol,analyst name,investment theme,source,sector,or country,making it seamless for Public Markets Investings team members to retrieve and share all relevant information.Fluent plays an important role for Fixed Income when they apply and track ESG ratings over time across corpo
270、rate and sovereign issuers,as further described in the“Manage and Mitigate Climate-Related Risks”section.In addition to Fluent,Fixed Income have been developing a Paris Alignment tool for certain tailored client solutions.This tool combines quantitative and qualitative information on company climate
271、 disclosures,climate strategy,and target-setting,to provide a forward-looking categorisation of an issuers alignment with the aims of the 2015 Paris Agreement (see the“Fixed Income:Bespoke Portfolio Approaches”section for more details).ESG Related DataMSCI RatingsMSCI ControversiesOverviewSummarySam
272、ple issuer is involved in controversies related to Product Safety&QualityRead MoreMSCI ESG Indicates ConstituentsESG ViewUpdated 09 February 2023ESG Credit ViewRoom for the analyst to provide a description of the ESG viewSocial Credit ViewRoom for specific S-pillar viewEnvironment Credit ViewRoom fo
273、r specific E-pillar viewGovernance Credit ViewRoom for specific G-pillar viewEngagementsGSAM ScoreWeightMomentumEngagementsEnvironment40%ImprovingBusiness Model&InnovationGreen Product/Business Opportunity20%Climate ChangeGreenhouse Gas Emissions20%Social40%StableProductProduct Quality&Safety,and We
274、llness20%PeopleHuman Capital&Workforce Management20%Governance20%ImprovingCorporate GovernanceBoard and Management Quality20%In-LineFluent.ActivitiesProxy VotingAnalyst ResearchEntities ViewAnalyst Coverage?SettingsExportPrintPDFAnalysts DAnalysts CAnalysts BAnalyst A(Primary)AnalystsSample Issuer(X
275、XX)Asset ClassCorporate CreditSectorConsumer CyclicalCoverage GroupFI High YieldLast Modified09 February 2023 by Analyst ACompany DescriptionHigh-level overview of the issuerIssuer OverviewESGGlobal Norms ViolatorN/AEngagementsGSAM Rating(Credit)2.9/5In-Line with PeersConcernWeakerIn LineBetterLeade
276、r ESG2.3In Line3In Line4Better40%20%20%ImprovingMomentum17 Jan 2023 to 27 May 205.6/10BBB-AverageCCCBBBBBBAAAAAAESG6.1A2.5B5.4BBB30%37%33%Moderate Controversy LevelV.SevereSevereModerateMinorESGMinorModerateMinor2.3In LineBetterN/A3.0In LineBetter4.0 BetterBetter3331Figure 5:ESG Integration Enhanced
277、 by Fluent38ESG ratings,data,and engagement are accessible on Fluent(a proprietary research tool).Ratings reflect the Fixed Income teams materiality matrix,informed by global standards and Fixed Income analysts expertise.Fixed Income uses a forward-looking momentum assessment to evaluate whether a c
278、ompany is on an improving,stable,or deteriorating path.Each environmental,social,and governance issue that drives the“GSAM Rating”can be expanded to view the relevant KPIs and their assessment.HIGHLIGHTFLUENT:PUBLIC MARKETS INVESTINGS PROPRIETARY RESEARCH TOOL39 Strategy|AWM TCFD REPORT 2022Introduc
279、tionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices39 The Public Markets Investing Fundamental Equity team employs a dynamic fundamental investment process that considers a wide range of factors,and no one factor,or consideration is determinative.For ESG Enhanced Stra
280、tegies,research analysts aim to complete ESG scorecards for all portfolio holdings.Public Markets Investing may invest in a security prior to completion of the ESG scorecard.Instances in which ESG scorecards may not be completed for a specific security prior to investment include,but are not limited
281、 to,IPOs,in-kind transfers,corporate actions,and/or certain short-term holdings.Fundamental Equity considers environmental,social,and governance factors as part of the fundamental research and stock selection process.As stakeholders,the strategies have a vested interest in helping the companies in w
282、hich they invest unlock value by improving corporate practices and being thoughtful stewards of capital.As part of its focus on long-term,active ownership,Fundamental Equity may,in certain circumstances,use proxy voting and engagement as some of the tools available to encourage positive corporate de
283、cision making and productive change,where possible.No one factor or consideration is determinative in the fundamental research and stock selection process.Public Markets Investing in its sole discretion and without notice may periodically update or change the process for conducting its ESG assessmen
284、t and implementation of its ESG views in portfolios,including the format and content of such analysis and the tools and/or data used to perform such analysis.Accordingly,the type of assessment depicted here may not be performed for every portfolio holding.No single factor or consideration is determi
285、native in the fundamental research and asset selection process.40 Public Markets Investing may invest in a company prior to completion of a scorecard.Fundamental Equity investment teams also use the Fluent platform as a centralised source of research on ESG and climate characteristics when conductin
286、g company-level assessments.For certain equity investments,the Fluent platform also provides an ESG Scorecard39 which consolidates more than 65 ESG-related Key Performance Indicators(“KPIs”),including,amongst others:environmental reporting;disclosure and transparency;environmental litigation and/or
287、controversies;climate change policies;sourcing of sustainable materials;usage of renewable energy sources;compensation linked to climate-related targets;waste management policies;and water usage.The ESG Scorecard can provide a standardised framework for conducting a baseline assessment of a companys
288、 ESG characteristics relative to peers.The Scorecard pulls in time series data,informed by the Sustainability Accounting Standards Board(“SASB”)materiality map,allowing analysts to focus only on climate factors that Public Markets Investing believes are meaningful to a firms growth,profitability,and
289、 risk management profile.Once an ESG Scorecard is completed,Public Markets Investings analysts capture the results in a qualitative rating,which can have implications for a stocks inclusion in certain portfolios.40 HIGHLIGHTFUNDAMENTAL EQUITY ESG SCORECARD AND ESG ENHANCED SOLUTIONSWithin Fundamenta
290、l Equity,there are five“ESG Enhanced”solutions where all holdings are required to have an ESG Scorecard completed and incorporated into the companys qualitative assessment.Other non-ESG dedicated products may also incorporate the ESG Scorecard into investment decisions,with select implementation acr
291、oss several regions.This analysis may flow through other elements of Fundamental Equitys investment process,including portfolio construction discussions(i.e.,when sizing decisions and risk management framework at the stock and portfolio level).The Fundamental Equity team also has access to an invest
292、ment dashboard tool,which provides a dynamic view of ESG metrics,including GHG emissions,within the portfolio.Investment teams can simulate potential trades and view the resulting impact on the carbon footprint of the portfolio.This tool is also integrated into daily risk reporting(see the“Integrati
293、on of Climate-Related Risks across the Investment Lifecycle”section for additional details).40 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices41 This includes the Private Equity,Infrastructure,and SIG business units.Private Mar
294、kets Investing collected reported GHG emissions data for all companies where equity ownership was greater than 25%.For investments with less than 25%ownership,Private Markets Investing collects data on a“best efforts”basis.42 Metrics include:the energy intensity of the asset;the upfront embodied car
295、bon from construction where applicable;the provision of technology to generate renewable energy onsite(e.g.,solar panels);the percentage of landlord and tenant electricity use that is supplied with renewable electricity(either onsite or offsite);whether the asset has been designed as all-electric or
296、 otherwise not dependent on fossil fuels(e.g.,no gas-based heating).43 This Real Estate ESG platform aggregates energy,water,and waste data on an asset(or even metre)level,including the use of electricity,natural gas,diesel,fuels,and district heating and cooling,from primary utility data sources.Bot
297、h landlord energy consumption(generally Scope 1 and 2)and tenant energy consumption (generally Scope 3)are tracked through this platform.PRIVATE MARKETS INVESTINGPrivate Markets Investings approach to climate-related risk assessment,mitigation,and identification of opportunities starts with collecti
298、ng data.Private Markets Investing periodically collects and aggregates data from a number of its portfolio companies and third-party sources,where possible,to help understand climate-related risks in its portfolio and find opportunities to drive value creation.CLIMATE DATA COLLECTIONRecognising the
299、need for decision-useful data and analytics,Private Markets Investing has developed a bi-annual data collection process to collect primary ESG data,including climate-related metrics,from select portfolio companies across Private Equity,Growth Equity,Infrastructure,and SIG.Throughout 2022,the Sustain
300、ability&Impact team provided strategic guidance and training to relevant portfolio companies.These portfolio companies received customised analysis from the Sustainability&Impact team,with discussions upon request,on suggested strategic areas for improvement(such as onboarding a GHG accounting tool,
301、assessing supply chain management,and evaluating physical climate-related risks),and an overview of a companys maturity relative to peers.Real Estate also undertook a dedicated ESG data collection process in 2022.Real Estate provided asset managers with detailed analysis of the data and suggested ar
302、eas for improvement,including energy audits,decarbonisation plans,and renewable energy sourcing.Private Markets Investing also received climate data through its participation in the ESG Data Convergence Initiative(“EDCI”),which aligns General Partners and Limited Partners to standardise private mark
303、ets ESG data collection,including climate-related data,for controlled assets.As part of this effort,Private Markets Investing received anonymised private markets benchmark data on GHG emissions and renewable energy.Given the relative scarcity of ESG data in private markets,this information is helpfu
304、l for Private Markets Investing to understand how these companies are performing as compared to their industry peers.GHG MEASUREMENT AND DECARBONISATION LEVERSFor several of Private Markets Investings equity portfolios,41 the Sustainability&Impact team partnered with a third-party vendor to deliver
305、GHG emissions accounting services to select portfolio companies.This tool allows portfolio companies to track GHG emissions,recommends potential decarbonisation levers,and provides advisory support on GHG emissions measurement and decarbonisation initiatives.With this,the company gains a detailed,ac
306、tivity-based GHG footprint that can serve as an important input to“portfolio companies”decarbonisation plans.In Real Estate,third-party appointed managers and developers of real estate investments and borrowers are expected to track climate-related data via a proprietary survey platform developed by
307、 Goldman Sachs.This survey platform tracks a variety of metrics,42 including GHG emissions intensity,embodied carbon,and renewable energy procurement for associated real estate investments.For stabilised equity investments,Real Estate collects more granular data on how investments are improving ener
308、gy efficiency and reducing GHG emissions,and tracks operational GHG emissions through a third-party software solution.43 The ESG business leads for Real Estate review climate and ESG data for quality and completeness.They use data to benchmark performance where relevant,e.g.,comparing energy use int
309、ensity against Carbon Risk Real Estate Monitor(“CRREM”),and identify engagement opportunities for underperforming assets,or where data appears incomplete or inaccurate.41 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesPrivate W
310、ealth Management clients have access to a public markets Portfolio Diagnostic Tool to help them articulate,refine,and work towards their long-term sustainable investing goals.Clients can leverage curated metrics relevant to climate transition and inclusive growth factors to assist with risk manageme
311、nt,transparency,accountability,and engagement around climate,sustainability,and impact objectives.The tool provides a deeper dive into a portfolios financed GHG emissions,helps investors explore exposure to specific business activities,and tracks a portfolios alignment with the SDGs.For financed GHG
312、 emissions,the tool provides metrics for the clients public equity and fixed income investment portfolios,such as carbon footprint(tonnes of CO2e44/$million invested)and carbon intensity(tonnes of CO2e/$million sales).The tool provides both a portfolio-and strategy-level view of GHG emissions metric
313、s,allowing clients to identify which strategies are contributing to or detracting from their portfolios representative GHG emissions.HIGHLIGHTPORTFOLIO DIAGNOSTIC TOOLPRIVATE WEALTH MANAGEMENTPlanned Enhancements for 2023SSG within Private Wealth Management regularly evaluates potential enhancements
314、 to the Portfolio Diagnostic Tool.Planned enhancements for 2023 include expanding insights on climate transition risks and opportunities by including a wider set of GHG emissions-related metrics,such as quantitative climate scenario analysis,which is intended to align with TCFD recommendations.Figur
315、e 6:Example Outputs from the Portfolio Diagnostic Tool45ESG Factor AnalysisThe following analysis compares your portfolio holdings in aggregate versus strategy level benchmark holdings in aggregate across avariety of climate transition and inclusive growth factors.Climate Transition 3 of 3 exceed be
316、nchmarkInclusive Growth 3 of 6 exceed benchmarkESG Policy ObjectivePortfolioBenchmark%Exceeds BenchmarkCarbon IntensityMetric tons CO/$mm salesMinimize101.1162.8-38%EcologicalImpacts0-10Minimize1.92.2-16%EnvironmentalOpportunities0-10Maximize5.55.4+3%Human CapitalDevelopment0-10Maximize5.65.4+4%Priv
317、acy/DataSecurity0-10Maximize7.57.5-1%Female DirectorsRepresentation%market valueMaximize63%61%+4%Business Ethics0-10Maximize4.64.4+4%IndependentBoard Majority%market valueMaximize94%93%+1%Diversity Policyfor Workforce%market valueMaximize81%80%+1%Private Wealth ManagementSource:Goldman Sachs PWM Sus
318、tainable Solutions Group,MSCI.The Exceeds Benchmark checkmark results when the percentagechange relative to the benchmark exceeds+/-2.5%.Note:Please see the Appendix for detailed de?nitions of each factor.Forintended recipient use only not for use and/or distribution to general public.42Business Inv
319、olvementThe following analysis looks at the percentage of each portfolios holding by weight that have at least 1%of revenue derived frompotentially objectionable business activities compared to the strategic benchmark.Prospective Portfo?ioPrivate Wealth ManagementSource:Goldman Sachs PWM Sustainable
320、 Solutions Group,MSCI.Note:Please see the Appendix for detailed de?nitions of eachfactor.For intended recipient use only not for use and/or distribution to general public.5Civilian FirearmAdult EntertainmentThermal CoalGamblingOil SandsShale GasOil&GasShale OilTobaccoAlcoholMilitary Weapons0.0%0.0%0
321、.0%0.0%0.0%0.0%0.1%0.1%0.1%1.0%1.0%0.0%0.0%0.2%0.5%1.3%1.1%2.2%1.9%0.7%2.4%1.5%PortfolioBenchmarkCarbon MetricsCarbon Intensity(tCO /$mm sales)Scope 1+2 emissions normalized by revenueCarbon Footprint(tCO /$mm invested)Scope 1+2 emissions normalized by portfolio sizeCO Conversion MetricsPortfolioBen
322、chmark%Greenhouse gas Emissions (Scope 1+Scope 2)(Metric Ton)3,1505,301-2,151-41%Carbon Footprint of Fossil Fuel Reserves (Total potential Scope 1+2 emissions)(Metric Ton)3,160164,477-161,317-98%Private Wealth Management82Current PortfolioBenchmark020406080100120140160Health Care TechnologyFinancial
323、sMetals and MiningReal EstateCommunication ServicesHealth CareConsumer StaplesConsumer DiscretionaryInformation TechnologyEnergyIndustrialsMaterialsUtilities20510152025303540455055BenchmarkCurrent Portfolio244 CO2e refers to units of carbon dioxide-equivalent GHG emissions.45 Source:Private Wealth M
324、anagement.As of June 2023.For illustrative purposes only.42 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendicesUNLOCK POTENTIAL VALUE THROUGH THE MANAGEMENT OF CLIMATE-RELATED RISKS,OPPORTUNITIES,AND IMPACT MANAGE AND MITIGATE CLIM
325、ATE-RELATED RISKSHELP PORTFOLIO COMPANIES AND CLIENT ASSETS NAVIGATE AND BENEFIT FROM THE CLIMATE TRANSITIONINVEST IN CLIMATE OPPORTUNITIESAWM TCFD REPORT 202243 Strategy|AWM TCFD REPORT 2022IntroductionExecutive SummaryGovernanceStrategyRisk ManagementMetrics and TargetsAppendices46 As part of the
326、investment process,Fixed Income may integrate ESG factors alongside traditional factors.The identification of a risk related to an ESG factor will not necessarily exclude a particular investment that,in the view of the Fixed Income investment team,is otherwise suitable and attractively priced for in
327、vestment,and Fixed Income may invest in an issuer without integrating ESG factors or considerations into the investment process.Moreover,ESG information,whether from an external and/or internal source,is,by nature and in many instances,based on a qualitative and subjective assessment.An element of s
328、ubjectivity and discretion is therefore inherent to the interpretation and use of ESG data.The relevance and weightings of specific ESG factors to or within the investment process vary across asset classes,sectors,and strategies and no single factor or consideration is determinative.Sovereign Bonds
329、are not included in the Public Markets Investing metrics calculations.PUBLIC MARKETS INVESTINGWithin Public Markets Investing,investment teams adopt different approaches to managing and mitigating climate-related risks,depending on the asset class,strategy,and client preferences,among other factors.
330、MANAGE AND MITIGATE CLIMATE-RELATED RISKSWithin Public Markets Investing,Fixed Income may integrate transition and physical risk into the overall credit assessment process for select investments in corporate credit and sovereign bonds.46Fixed Income leverages the proprietary Fluent tool when conduct
331、ing research on specific corporate or sovereign debt issuers.The Fluent tool provides a variety of climate-and sustainability-related KPIs which are integrated into the assessment framework(see the“Empower Decisions through Actionable Climate Intelligence”section for more details).Within Sovereign B
332、onds,Fixed Income has developed an assessment framework for benchmarking sovereign ESG performance(inclusive of climate)that allows investment teams to quantify and compare environmental factors across emerging and developed markets.Recently,Fixed Income enhanced the frameworks analysis of climate-r
333、elated risks by developing a formalised ESG rating process that provides environmental and social inputs to Public Markets Investings sovereign risk scenario assessments.The framework leverages a dataset that connects climate physical risk exposure to a countrys distribution of population,agricultural production,and overall GDP growth and development.Fixed Income further evaluates the transition r
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