Goldman Sachs Ignores Activist Call To Abandon Oil And Gas - OilPrice.com
Goldman Sachs Ignores Activist Call To Abandon Oil And Gas | OilPrice.com
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The chief executive of Goldman Sachs has refused to yield to pressure from climate activists calling for the bank to stop financing oil and gas companies.
“Traditional energy companies are hugely important to the global economy, they are hugely important to Goldman Sachs,” David Solomon said at the American Energy Security Summit in Oklahoma this week, as quoted by Bloomberg. “We are all going to continue to finance traditional companies for a long time.”
Pressure on banks from climate activists has been growing and many have in one way or another succumbed to it, committing to curbs in their exposure to the oil, gas, and coal industry. No major bank, however, has gone the whole nine yards to stop doing any business with the energy industry.
Pressure has in some cases been so strong that banks have given up on certain projects. The most recent and quite notable case is that of the East African Crude Pipeline, a $5-billion project that will transport crude from landlocked Uganda to the Eastern African coast of Tanzania.
Climate activists applied such pressure on Western banks that were going to take part in the funding of the project that they gave up and were replaced by Chinese lenders.
In Europe, banks have already begun tightening their conditions for lending to the oil and gas industry in line with climate activist calls and government net-zero plans. As a result, the local supply of oil and gas has suffered further.
This is not yet the case in the United States but pressure remains significant on Wall Street to get more active in what effectively comes down to punishing the oil and gas industry for producing oil and gas.
Meanwhile, however, Solomon noted during his speech in Oklahoma that what he called traditional energy companies needed to be supported because without energy security “society won’t function.”
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By Irina Slav for Oilprice.com
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”