Climate Risk Management GOVERNANCE We are continuing to integrate climate risk into broader business and risk management practices, and we shared an update on our progress in the recent Task Force on Climate-related Financial Disclosures report, Accelerating Transition. Our scope and de昀椀nitions of climate risks include: • Transition risk emerges from climate-related policy, legal, technology, and market changes as the economy shifts toward lower carbon usage. • Physical risk is the risk to Goldman Sachs properties, collateral, or investments due to speci昀椀c weather events and longer-term shifts in the climate. Physical risk has the potential to reduce the 昀椀nancial value of assets. Risks related to the physical impacts of climate change include acute risks and chronic risks. As included in our Task Force on Climate-related Financial Disclosures report, Accelerating Transition, we have developed methodologies for both physical and transition risk, and these methodologies serve as a foundation for measurement and integration of climate risk into business and risk processes across the 昀椀rm. Integrating climate risk into the 昀椀rm’s overall approach to risk management continues to be a priority. The following are examples of how we are integrating climate risk: In our risk identi昀椀cation process, climate risks are identi昀椀ed and classi昀椀ed, and then stressed in physical and transition risk stress-testing methodologies. • Climate risks are incorporated into the 昀椀rm’s internal risk taxonomy. • Physical risk is assessed across our own operational risk footprint and at all stages of our global real estate strategy — from site selection and building design through occupancy and facilities management. • We also assess physical risk for the 昀椀rm’s real estate positions, including equity investments and lending positions. • As we integrate climate risk into broader risk management, we have begun incorporating climate risk into credit evaluations and underwriting processes for select transactions, including considering climate risk factors and mitigants. • As appropriate, we are integrating climate risk considerations into appropriate frameworks and policies. Sustainability Report 2021 Governance | 2021 Transaction Breakdown and Highlights 92