25 Sustainability Report 2021 Climate Transition | Driving Transition 1—Ecosystem Marketplace: “ State of the Voluntary Carbon Markets 2021 ,” September 2021. 2—Anders Nordeng, Refinitiv: “ Carbon trading: exponential growth on record high ,” February 2022. Demand-Side Trends As corporates set net zero or carbon neutrality targets and increase their sustainability commitments, the demand has increased for carbon offsets. Market Demand for Carbon Offsets Carbon offset demand has increased significantly in the past few years on the back of a rapid expansion in corporate sustainability commitments. However, compared to compliance markets, the voluntary market is still quite small, with current annual trading volumes amounting to around $1 billion 1 compared to roughly $750 billion annually in the EU ETS2 . Supply-Side Trends: Obstacles for Growth Carbon offsets supply remains fragmented due to a wide range of project types and a number of independent standards and associated registries. Registries play an important role in the voluntary carbon market by dictating which methodologies are viable for assessing a carbon offset project, issuing the actual credits, and keeping track of credit ownership. CLIMATE TRANSITION DYNAMICS AND CHALLENGES OF A NASCENT VOLUNTARY CARBON MARKET Our Involvement in Carbon Markets Advocacy Work Goldman Sachs served on a private sector-led task force aimed at scaling global voluntary carbon markets to help meet the goals of the Paris Agreement. The Taskforce on Scaling Voluntary Carbon Markets — launched by Mark Carney, UN Special Envoy for Climate Action and finance advisor to UK Prime Minister Boris Johnson for COP26 — is sponsored by the Institute of International Finance. The task force published its blueprint on creating a large- scale, transparent carbon credit trading market in January 2021. The blueprint included 20 comprehensive and tangible actions, as well as a roadmap for implementing a high- quality, high-integrity voluntary carbon market at pace and scale. Looking Ahead: Additional Learnings from Offset Sourcing Initiatives The availability of carbon offsets from certain projects, particularly nature or technology projects that remove CO 2, is limited. In response, Global Markets has issued requests for removal project proposals that can address client interest in the market as well as meet the firm’s own net zero objectives in offsetting its operational emissions.