ESG Debt Market Sees Goldman Sachs' Return with $700 Million Deal

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Picture of Goldman Sachs Returning to ESG Debt Market with $700 Million Deal

The multinational investment banking firm Goldman Sachs is raising $700 million in the US investment-grade market to help fund environmental and social initiatives, its first benchmark sustainable-bond issuance in almost a year.

According to a source familiar with the situation, the New York-based lender is offering a five-year sustainability bond. The self-led offer might return 1.6 percentage points, which is above Treasuries, said the person, who did not want to be identified because the terms are confidential. In the United States, the issuance of more than $500 million is regarded as a benchmark deal.

According to the source, the money raised from the purchase will go toward several programmes and assets that address major environmental, social, and sustainability challenges, such as climate change and inclusive growth.

Investors and regulators are pressuring the financial sector to do more to address climate change and social challenges, including decreasing money flows to fossil fuels. The top US banks have become a regular presence in the global sustainable finance market.

According to Bloomberg data, financial corporations have raised approximately $111 billion in sustainable debt this year, making them the second-largest issuer of sustainable bonds after governments.

Despite promoting net-zero targets, the industry has continued to funnel hundreds of billions of dollars to the world's largest polluters.

In February 2021, Goldman joined the sustainable finance market for the first time, raising $800 million in sustainable bonds.

The bank announced at the time that as part of its goal to deploy $750 billion in sustainable finance, investment, and advisory activity by 2030, it would issue environmental, social, and governance bonds every month.

The company's website said it reached almost $300 billion of the overall objective by the end of 2021, including $167 billion for climate transition and another $50 billion for inclusive growth initiatives.

Source: Bloomberg

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