Goldman Sachs GS SUSTAIN: ESG of the Future We continue to believe that equity investors focused on Sustainability and ESG issues will become more forward-looking in the coming years, a function of five factors: n Regulation — particularly in Europe, under the influence of the EU Green Taxonomy framework and SDFR — but also in the US with proposed mandatory emissions disclosure. n New sustainability bond issuance — with performance linked to sustainability targets. n Increase in capital required to be on track for Net Zero, Clean Water and Infrastructure goals — see section “Theme 2: Green Capex beneficiaries — Innovation, Inflation, Policy key catalysts” for more details. n Increased focus on whether we are on track for other UN Sustainable Development Goals — due to pressure from stakeholders to contextualize environmental and social impact of business activities and portfolios. n Supply chain risks — due to potentially long lead-times for critical projects, timely investments are necessary.