Goldman Sachs is to announce a target to make $40 billion of renewable energy investments or financings over the next ten years – implying a lower level of financing by the bank than in the previous six years.

The bank is set to announce this new target at its annual meeting today.

“This target reaffirms our commitment to serving the needs of our clients in this space and playing a catalytic role in this important market,” says the bank’s environmental initiatives section, seen by Environmental Finance.

But the average $4 billion target is lower than the $4.8 billion that Goldman Sachs invested in the sector in 2011, and also less than the average of $4.6 billion since its initial environmental target was set in 2005. From that point until the end of 2011, the bank had arranged $24 billion worth of financing and invested $4 billion of its own funds into renewable energy, Reuters reported today.

“[The commitment] has no significance as long as you can’t compare it to bad investments in fossil fuels, particularly in coal,” said Yann Louvel, climate and energy campaign coordinator at Dutch NGO BankTrack. Goldman Sachs was ranked the 11thworst bank in terms of coal financing in its study of so-called ‘climate killer’ banks.

He added that Goldman Sachs is one of the last big banks without a policy on mountain-top removal mining, which involves using explosives to remove mountain tops to reach underlying coal seams.

Raymond Dhirani, finance policy officer at conservation group WWF UK, said he is supportive of large investments in renewable energy but agreed that without comparison with Goldman’s investments in, for example, coal and gas “it’s a bit of a number in a vacuum”.

“If the plan is really to shift investment to renewable energy, that would be really interesting,” he added.

Goldman Sachs also plans to reduce its net carbon emissions to zero by 2020, which the NGOs also would like more detail on.

“If they’re trying to go green then that should be communicated, but if that’s the case I would have thought they’d come out with something a lot more detailed on this,” said Dhirani.

Goldman Sachs is neither the first US bank to make such a commitment, nor is its target the largest. In 2007, Citi set a $50 billion investment target over 12 years, while Wells Fargo recently made a new commitment, pledging $30 billion in loans and investments for renewable energy and other clean initiatives through 2020.

By Elza Holmstedt Pell
Environmental Finance