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GS SUSTAIN: Circular Economy Report

Note: The following is a redacted version of the original report published May 3, 2022 [37 pgs]. EQUITY RESEARCH | May 3, 2022 | 10:24PM BST Research The evolution towards a Circular Economy The need to move towards a Circular Economy – one in which consumption of ecological resources is equal to or less than what the planet can regenerate – has been discussed for years but not sufficiently deployed, with resource consumption 75% more than Earth's regeneration capacity in 2021 and waste on track to be 70% higher by 2050 vs. 2016. However, we see three catalysts that can push forwar d deployment of Circular Economy solutions, which could potentially unlock $1 tn of annual materials savings, based on a World Economic Forum study. First, the spike in commodity prices is likely to increase deployment of energy/waste/food efficiency solutions from both individuals and corporates. Second, the intrinsic link between resource consumption/waste and GHG emissions will make Circular Economy solutions critical for transitioning towards a low carbon economy. Third, the extension of the EU Taxonomy to include Circular Economy categories is likely to increase corporate and investor focus on solutions as well as valuation uplift for strong performers. In this report, we detail seven Circular Economy themes. Evan Tylenda, CFA Madeline Meyer Grace Chen Georgina Fraser, Ph.D. Ajay Patel Brian Singer, CFA Derek R. Bingham Sharmini Chetwode, Ph.D. +44(20)7774-1153 +44(20)7774-4593 +44(20)7774-5119 +44(20)7552-5984 +44(20)7552-1168 +1(212)902-8259 +1(415)249-7435 +852-2978-1123 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Goldman Sachs International Goldman Sachs International Goldman Sachs International Goldman Sachs International Goldman Sachs International Goldman Sachs & Co. LLC Goldman Sachs & Co. LLC Goldman Sachs (Asia) L.L.C. Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S. The Goldman Sachs Group, Inc.

Authors Evan Tylenda, CFA Madeline Meyer Grace Chen Georgina Fraser, Ph.D. +44(20)7774-1153 +44(20)7774-4593 +44(20)7774-5119 +44(20)7552-5984 [email protected] [email protected] [email protected] [email protected] Goldman Sachs International Goldman Sachs International Goldman Sachs International Goldman Sachs International Ajay Patel Brian Singer, CFA Derek R. Bingham Sharmini Chetwode, Ph.D. +44 20 7552-1168 +1(212)902-8259 +1(415)249-7435 +852-2978-1123 [email protected] [email protected] [email protected] [email protected] Goldman Sachs International Goldman Sachs & Co. LLC Goldman Sachs & Co. LLC Goldman Sachs (Asia) L.L.C. Rachit Aggarwal Emma Jones +1 212 934-7689 +61(2)9320-1041 [email protected] [email protected] Goldman Sachs India SPL Goldman Sachs Australia Pty Ltd

Goldman Sachs GS SUSTAIN Executive Summary - Evolving towards a Circular Economy - back to the future William McDonough, the 1 A Circular Economy could help add $4.5 trillion in additional economic output by 2030, and $25 trillion by 2050. The World founder of Cradle to Cradle®, stated that the world doesnt Economic Forum estimates that by 2025 recycling, reuse, and remanufacturing could help the economy unlock $1 trillion a have a ‘waste issue, it has a year untapped resource savings. We see rising commodity prices leading to increased deployment of energy/waste/food ‘design issue efficiency solutions from both individuals and corporates and the extension of the EU Taxonomy to include Circular Economy categories will provide a boost in recognition from corporates and investors. 70% of GHG emissions are Transitioning towards a Circular Economy will be pivotal t o solving decarbonisation and will become an increasing directly linked to material focus for investors, corporates and regulators to achieve net zero carbon goals and decouple economic growth from handling and use - including resource consumption, in our view. Zero waste pledges are few and far between compared to the proliferation of net zero from extraction, transport, processing, use, and end of life carbon pledges from companies, governments and investors, yet both are necessary for a sustainable low carbon economy according to The Circularity Gap due to the intrinsic link between resource usage, energy and emissions (resource-energy nexus). Decarbonisation efforts Report (2022) have traditionally focused heavily on scaling up renewable energy and increasing energy efficiency, while focusing little on the benefits that can be gained via circular economy solutions. We believe the decarbonisation synergies gained through transitioning towards a circular economy will become an increasing focus and priority among governments, corporates and investors in the years ahead. We identify 7 circular economy solutions that can help corporates reduce their dependence on increasingly scarce resources and create new service offerings, including: 1) Efficiency; 2) Substitution; 3) Durability; 4) Ecodesign; 5) Asset Utilisation; 6) Recyclability and Recycling; and 7) New business models and circular partnerships. The next phase of the EU Taxonomy will catalyze investor and corporate focus on the circular economy. We see corporate and investor adoption of the EU Taxonomy as inevitable, serving as a tool for both investment and eventual corporate strategic decision-making. New sectors covered under the circular economy include some of the most underweight sectors in ESG funds currently, presenting opportunities for re-weighting. We map the 21 new circular economy activities to our existing GS SUSTAIN EU Taxonomy tool. 1 Lacy, P. & Rutqvist, J.. (2016). Waste to wealth: The circular economy advantage. 10.1057/9781137530707. 3 May 2022 2

Goldman Sachs GS SUSTAIN Exhibit 1: Increasing circularity for four key materials in Europe could reduce CO2 Exhibit 2: Some of the most underweight industries in ESG funds have portions of revenue emissions 56% vs business as usual that are eligible under the Taxonomy EU Emissions reduction potential from a more circular economy, Mt CO2 per year GICS 3 industries most relatively underweight in ESG funds, Mar 2022, with avg. eligible revenue % in exposed sectors 600 530 178 500 ear y -56% 400 per 56 300 62 dioxide 234 0% 200 arbon -20% Relativ c 13% 44% 100 20% 87% of 97% 96% 88% e Mt 65% -40% 0 86% u 62% n 2050 Baseline Materials Product Materials Circular Business 2050 Circular 88% 82% d e Recirculation Efficiency Models Scenario 37% r w 55% -60% eigh 91% 41% t Cement Aluminium Plastics Steel 16% Climate Change Mitigation (CCM) pot. eligible exposure -80% % Circular Economy (CE) pot. eligible exposure Avg pot. eligible revenue % in sector to CCM or CE -100% Source: Material Economics, Data compiled by Goldman Sachs Global Investment Research Source: Morningstar, Goldman Sachs Global Investment Research 3 May 2022 3

The Circular Economy in Numbers The Problem… Global waste generation is set to 1.6 billion tonnes of CO2 emissions were Over 70% of global waste is disposed increase 70%by 2050 generated from solid waste management of in landfills, 33% of which is alone in 2016 mismanaged through ‘open dumping’ 11 million metric tonnes of plastic Up to40% of food produced in the US ends In 2018, the average amount of were leaked into the ocean in 2016 up as waste, while the average UK family clothing and textile waste added up to throws away £720 worth of food per year 80 lbs per person in the US Progress and Solutions A Circular Economy could help add $4.5 Landfilled waste fell 58%in the EU between Circular economy solutions could help trillion in additional economic output 1995 and 2020, while it increased 0.6% in reduce global GHG emissions by 39% by 2030 and $25 trillion by 2050 the US between 1990 and 2018 In the EU, materials recirculation, materials efficiency increase and circular Recycling cardboard takes 75%of energy On average, it costs 44%less to business models for cement, aluminium, required to manufacture new cardboard; recycle trash than send it to landfills, plastics and steel could reduce CO2 recycling plastic takes 84%less energy than and 54% -60% less to recycle trash emissions by 56%vs a business-as- making it from raw materials than to incinerate it usual scenario Sources: World Bank, Pew Charitable Trusts, Dept. for Environment Food & Rural Affairs, Ellen MacArthur Foundation, Waste to Wealth, Eurostat, EPA, Circle Economy, Recycling Revolution, data compiled by Goldman Sachs Global Investment Research

Goldman Sachs GS SUSTAIN The linear world as we know it Despite the world already consuming 1.75x more resources than the Earth produces annually in 2021, global waste generation is set to increase 70% by 2050 (from a 2016 base), according to the Global Footprint Network and World Bank, highlighting the need to transition our linear economy to become more circular. Current consumption and waste systems are not often designed and built with end-of-life in mind, and, as a result, a significant portion of materials face sub-optimal utilization and disposal. This traditional ‘take-make-waste’ economy contributes to negative impacts including excess emissions contributing to climate change, unwanted pollution, societal health issues, access to clean water, and more. The transition to a circular economy is pivotal in the fight to mitigate climate change, as excess emissions are released from inefficient use of resources and waste, with an estimated 1.6 billion tonnes of CO2e emissions generated from solid waste management alone in 2016 (1-3% of total GHG), the equivalent of ~350 million cars on the road. Current waste generation per capita is disproportionately generated by developed economies, while waste growth is set to come from developing countries. As low-income countries further develop, their waste footprint is expected to grow, making it critical to have proper means for recovery or safe disposal. While high-income countries are expected to grow their waste footprint at a smaller rate, this starts from a higher base, as the top quartile income level generates 34% of waste per year (World Bank). Municipal waste generation in the US increased 232% from 1960 to 2018 (40% since 1990), while generation in China increased 218% between 1990 and 2017 and in Europe (OECD) increased 28% between 1990 and 2020. Moving forward, North American waste is expected to increase 37% between 2016 and 2050 compared to 197% in Sub-Saharan Africa, 98% in South Asia and 53% in East Asia & Pacific (World Bank, Exhibit 3 ). Exhibit 3: Sub-Saharan Africa and South Asia are expected to see the highest waste growth Exhibit 4: ... however, this growth among developing economies is not expected to lead to rate through 2050... per capita waste generation even half that of North American levels Total waste generation and projected waste generation, million tonnes per year Total waste (and projected) generation per capita, in kg per capita per day 800 2016 2030 projected 2050 projected 3 2016 2030 projected 2050 projected 1.3% 700 2.0% day 0.4% ear /2.5 per y600 3.2% 500 0.7% capita 2 / onnes 400 1.4% 0.9% kg 1.5 0.8% 0.6% t CAGR: 2% mn 300 apita, CAGR: 0.8% 1.1% in 1 1.2% 200 per c 0.9% ste, 0.5 a100 ste W a 0 W 0 Middle East & Sub-Saharan Latin America North America South Asia Europe & East Asia & Middle East & Sub-Saharan Latin America North America South Asia Europe & East Asia & North Africa Africa & Caribbean Central Asia Pacific North Africa Africa & Caribbean Central Asia Pacific Source: World Bank, Goldman Sachs Global Investment Research Source: World Bank, Goldman Sachs Global Investment Research 3 May 2022 5

Goldman Sachs GS SUSTAIN Open dumping as a means of Issues associated with waste are interlinked with nearly every facet of the environment - from land, air and water, waste disposal involves a site and significant portions of public health. Over 70% of global waste is sent to landfills, 33% of which is mismanaged where solid waste is disposed through ‘open dumping’, leading to further issues around pollution, water, emissions, etc. Waste is inconsistently handled of in a manner that does not protect the surrounding across geographies, and, according to the World Bank, open dumping in low-income countries accounts for 93% of waste environment or society - leaving disposal, where waste generation is expected to increase by more than 300% by 2050. This further amplifies waste’s waste more susceptible to influence on the environment and society, as landfills are the third largest man-made source of methane gas in the US, a burning, scavengers and significant contributor to climate change and associated with negative health effects. rodents, as well as leachate, landfill gases and other sanitary While landfill disposal has leveled off or declined in developed economies, further reductions are needed as hazards. cumulative waste continues to grow. While landfill growth has plateaued in high-income countries, significant volumes of Municipal solid waste landfills wasted material are still being disposed of through landfills or incineration. Most progress on recovery and recycling is being account for 14.5% of made in developed economies. Total municipal waste landfilled in the EU fell 58% human-related methane between 1995 and 2020 (Exhibit 7), from emissions in the US, after 54% of generation to 23%, though incineration increased 105% over that same time period. US municipal waste generation natural gas and petroleum increased 40% between 1990 and 2018, but landfilled waste only increased 0.6% over that time due to more waste being systems (32%) and enteric incinerated (12% in 2018) and recycled - recycling rates increased from 14% in 1990 to 24% in 2018 (Exhibit 6). Progress fermentation (27%), according to the EPA. towards a circular economy will go beyond stopping growth to moving towards zero waste to landfill and increased resource utilization - and require a focus on solutions for both developed and developing economies. Exhibit 5: Waste generation in the US increased 232% Exhibit 6: 50% of municipal waste in the US was landfilled Exhibit 7: While only 23% of municipal waste in the EU was between 1960 and 2018, and 40% since 1990 in 2018, compared to 24% recycled, 12% incinerated for landfilled in 2020, incineration has increased since 1995, at Total municipal solid waste generated by year in the US, million energy and 12% composted/other food management 18% of total waste disposal in 2020 tonnes Total municipal solid waste generated by year in the US, 1960 - Total municipal waste generated in the EU, 1995 - 2020, million 2018, million tonnes tonnes 300 300 300 tonnes250 tonnes250 onnes250 t million 200 million 200 illion 200 m 150 150 150 generated, generated, 100 100 generated, 100 W SW S W 50 50 S otal M otal M tal M50 T T 0 o 0 T 0 Glass Paper & Paperboard Food Metals Landfill Recycling Composting Waste to Energy Landfill Recycling Composting Incineration Other Misc Inorganic Waste Plastics Rubber & Leather Textiles Wood Yard Trimmings Other Spike in 2018 is largely due to enhanced food measurement methodology to account Source: EPA, Data compiled by Goldman Sachs Global Investment Research Source: Eurostat, Data compiled by Goldman Sachs Global Investment Research for ways wasted food is managed. Source: EPA, Data compiled by Goldman Sachs Global Investment Research 3 May 2022 6

Goldman Sachs GS SUSTAIN Despite soft measures to reduce resource demand, especially with plastics, demand for plastics and other materials has not decreased on an absolute basis - while some material substitutes can do more harm than good. Some policy and legislative actions taken to reduce demand have resulted in substitution rather than reduced consumption, sometimes without analysis of whether the alternatives are better or worse for the environment. For example, bans on plastic bags are often met with paper and mixed material replacement bags that can have a higher climate impact depending on their weight. As the regulatory environment around waste and circularity continues to gain momentum, we think the demand for virgin materials will be influenced by efforts to reduce consumption and increase recycled inputs, rather than material substitution. A Circular Economy = a Low Carbon Economy Material usage/throughput and associated emissions go hand in hand, as links between waste and emissions (resource-energy nexus) extend far beyond the emissions directly from landfills. Through each step of a resources value chain, emissions and waste are generated before products meet their end use, before further waste and emissions are generated from end-use of products and eventual disposal. Inputs like minerals and ores are much more material-intensive than their emissions profile, while other materials like fossil fuels and biomass are more emissions-intensive (Exhibit 8). As each resource moves towards its end use (Exhibit 9), the intrinsic link with emissions becomes clearer, along with a recognition that net zero carbon cannot be achieved without moving towards a circular economy. Exhibit 8: Emissions and materials footprints are intrinsically linked, though some resources Exhibit 9: This link moves beyond resources to the application of resources to meet societal have a more material impact than emissions and vice versa needs Material throughput and GHG emissions associated with resources and waste, in Gt for resource Material throughput and GHG emissions associated with seven key societal needs, in GT (CO2e for and CO2e for emissions, including overlap emissions) 50.8 Housing 38.8 Minerals 13.5 1.6 5.6 Communication 3.5 Ores 10.1 1.2 Mobility 8.7 17.1 Fossil Fuels 15.1 Healthcare 9.3 38.4 3 Services 10 24.6 6.4 Biomass 16 6.9 Consumables 5.6 Waste Nutrition 21.3 1.9 10 Resources footprint (Gt) Emissions footprint (Gt) Resources footprint (Gt) Emissions footprint (Gt) Source: Platform for Accelerating the Circular Economy (PACE), Data compiled by Goldman Sachs Global Investment Research Source: Platform for Accelerating the Circular Economy (PACE), Data compiled by Goldman Sachs Global Investment Research 3 May 2022 7

Goldman Sachs GS SUSTAIN Circular Economy solutions could help reduce global GHG emissions by 39%, making the Circular Economy critical to any decarbonisation strategy. We highlight 21 circular solutions across various sectors of the economy that can collectively contribute to a 22.8Gt CO2e emissions reduction, helping to bridge the emission gap (19-23Gt) from the current 2.4C scenario, which takes into account latest COP26 Paris Commitments, towards a 1.5C scenario (Exhibit 10). Some of the biggest circular solutions aiding in GHG emissions reductions revolve around housing, including natural housing solutions (-6.5 Gt CO2e), resource-efficient construction (-3.5 Gt CO2e) and reducing floor space (-3.2 Gt CO2e). Nutrition and mobility are also key areas where circularity can reduce emissions, including sustainable food production (-3.4 Gt CO2e), and reducing travel (-2.4 Gt CO2e). Exhibit 10: Circular solutions can help reduce global emissions by 22.8Gt, or 39% (from 2019 levels), helping to bridge the gap left by new COP26 Paris Commitments towards a 1.5 degree scenario by 2050 Emission reduction of 21 key circular solutions, Gt CO2 eq based on 2019 levels, assuming NDCs are met by 2032 *Some solutions emissions reduction overlap with other solutions. Source: Circle Economy, Data compiled by Goldman Sachs Global Investment Research 3 May 2022 8

Goldman Sachs GS SUSTAIN Other important considerations for a Circular Economy A note on plastics: At least 42 plastics facilities have opened in the US since 2019 and the US plastics industry is responsible for over 230mn tonnes of CO2e emissions per year. Plastics make up over 12% of municipal waste generation in the US but 18% of waste sent to landfill. The UK has a much higher recovery rate for plastics, at 44% recovered/recycled, but globally 11 million metric tonnes of plastic were still leaked into the ocean in 2016, according to the Pew Charitable Trusts. Decarbonisation and plastic waste is not simply solved by substituting away from plastics, as alternative materials typically carry a higher emission profile per use case (Exhibit 17); rather improved recycling and technological advancements in pyrolysis (chemical recycling) are needed, in our view. We explore plastics recycling more below. Food waste is still a massive problem. Up to 40% of global food produced ends up as waste, and the average family throws away approximately £720 worth of f ood per year, according to the Dept. for Environment Food & Rural Affairs, where homes make up 43% of total food waste by weight. Composting still makes up a very small portion of waste disposal methods, as food waste makes up 24% of landfilled material and 22% of combusted municipal solid waste in the US and results in $160 billion in food wasted every year (EPA & USDA). Uneaten and wasted food contains enough calories to support 150 million people each year, significantly more than the 35 million Americans facing food insecurity (EPA). US grocery chain Grocery Outlet (GO) helps to eliminate food waste throughout the food retail / distribution channels in the US by purchasing surplus inventory and repackaged products, much of which otherwise might have been wasted, while also providing cheaper food for lower-income populations. Exhibit 11: Food makes up a huge portion of global waste, and each source requires Exhibit 12: Households made up only 12% of total waste generation in the UK in 2018 „ different solutions to minimise disposal in landfills Food made up 18% of household waste Global waste production by type, with additional breakdown of sources of food waste Total waste generated in the UK by material and source, 2018, million tonnes Food Waste Sources Other Other 25 2% 2% 14% 200 Households Other Dredging spoils 16% Farms Soils Household 2% Manufacturers 20 Food 4% 150 Minerals 5% 40% Consumer- Discarded facing Household & 15 Equipment 44% businesses similar Construction, Textile 100 Vegetal waste demolition & Wood 12% 43% Homes Wood excavation 10 Plastic Plastic Paper & 50 Paper & 5 Cardboard 17% cardboard Glass Glass 0 Metal Metals Commercial & Households, by Paper and cardboard Plastic Glass 0 Industrial Metal Wood Rubber and leather By material By source material Other Manufacturers Food Source: World Bank, ReFed, Goldman Sachs Global Investment Research Source: Department for Environment Food & Rural Affairs, Data compiled by Goldman Sachs Global Investment Research 3 May 2022 9

Goldman Sachs GS SUSTAIN Electronics by the UN, and recycling rates across Waste: The potential value of raw materials in e-waste was valued at US $57bn in 2019 electronics are only 17%. Recycling electronics in order to salvage raw metals and materials can have other unexpected benefits, as recycled lithium-ion batteries were found in a study to perform better than new ones. Other efforts to tackle e-waste involve extending the useful life of products: Replacing a smartphone after 4 years instead of the typical 3 could prevent annual carbon emissions equal to the annual emissions generated by the entire country of Ireland. Textiles and Apparel waste is an increasingly important challenge with the proliferation of fast-fashion and synthetic and mixed materials that reduce recyclability. Between 2000 and 2015, clothing production doubled while utilization (the number of times an item is worn before being thrown away) decreased by 36%, while only c.1% of clothing is recycled back into new clothing (Ellen MacArthur Foundation). And in 2018, the EPA found that the average amount of clothing and textile waste added up to 80 lbs (36 kg) per person. Also in 2018, the global fashion industry accounted for 4% of total global GHG emissions (2.1 bn tonnes). Circular themes are picking up in the industry: resale, rental, repair and remaking, and resale and rental platforms like Depop, Rent the Runway, The RealReal, Vinted, Poshmark, ThredUp and Vestiaire Collective have reached billion-dollar valuations. The Ellen MacArthur Foundation estimates that circular business models and make up 23% of the global fashion market by 2030, providing significant environmental savings from increased product lifespans and reduced production of virgin materials and items. Additionally, the secondhand market is projected to grow to twice the size of the fast fashion industry by 2029 according to Global Data (Exhibit 13). Exhibit 13: The total secondhand market is projected to grow to almost twice the size of fast fashion by 2029. Secondhand market size in 2009, 2019 and 2029 ($USD) $90bn Fast Fashion Traditional Thrift & Donation Resale $90bn $80bn $80bn $70bn $70bn $60bn 44 $60bn $50bn $50bn $40bn 43 $40bn $30bn 36 $30bn $20bn 7 $20bn 22 36 $10bn 21 $10bn 0 10 0 2009 2019 2029 Source: GlobalData, Goldman Sachs Global Investment Research 3 May 2022 <0

Goldman Sachs GS SUSTAIN The business and environmental opportunity for transitioning to a Circular Economy A Circular Economy could help contribute $4.5 trillion in additional economic output by 2030, and $25 trillion by 2050 2 - driving new revenue sources and reduced costs . The World Economic Forum and Ellen MacArthur Foundation estimates that by 2025 recycling, reuse, and remanufacturing could help unlock $1 trillion a year in wasted resources and reduce 100 million tonnes of waste globally. Given the emergence of a commodity super-cycle and higher material costs, we expect businesses and investors to give greater focus to the value potential of a circular economy to help alleviate dependence on scare resources and generate new revenue opportunities. Circular Partnership (Industrial Utilising the Oxford Institute for Energy Studies, we see seven critical components of a Circular Economy that can Symbiosis) example: help to unlock this value: Kalundborg (Denmark) - an oil refinery, a power station, a 1) Efficiency - improving material efficiency by reducing material volumes and energy required in production and use gypsum board facility and a pharmaceutical company share 2) Substitution - substituting hazardous or difficult-to-recycle materials with more circular alternatives ground, surface & waste-water, steam and fuel, and also 3) Durability - increasing useful life of products through enhanced durability exchange a variety of byproducts that become 4) Ecodesign - designing products that are easier to maintain, repair, upgrade, re-manufacture, and recycle feedstocks in other processes. 5) Increased Asset Utilisation - increasing use intensity of goods and switching consumer focus towards services (rental, lending, sharing services) 6) Increased recyclability and recycling - incentivise separate collection of materials among business and consumers and develop markets for secondary raw materials 7) New business models and circular partnerships - promote products-as-a-service, clustering industrial activities to prevent by-products from becoming waste (collaboration between businesses or value chain partners to ensure byproducts of industrial processes are maximally utilised rather than wasted). 2 Lacy, P. & Rutqvist, J.. (2016). Waste to wealth: The circular economy advantage. 10.1057/9781137530707. 3 May 2022 <<

Goldman Sachs GS SUSTAIN Exhibit 14: Circularity in manufacturing could yield net materials cost savings of up to Exhibit 15: Circularity in relevant fast-moving consumer goods sectors could yield net US$630 billion p.a. in the EU alone materials cost savings of ~US$700 billion p.a. globally Net material cost savings in complex durables with medium lifespans, U$ bn per year, EU Net material cost savings in consumer industries, U$ bn per year, global 600 520 - 630 800 ear) Motor vehicles 10 durables 26 Machinery and equipment per y 600 98 Tissue and hygiene bn consumer ear) complex400 340 - 380 Electrical machinery and in y Beauty and personal care in (U$ apparatus 121 ings ings Other transport avbn per Fresh food av s (U$ 400 Beverages s lifespans Furniture cost 155 cost 200 tries Apparel Radio, TV, and communication material indus Packaged food ith medium 200 Other Net material w Medical precision and optical net 270 equipment 0 Office machinery and computers Transition Advanced 0 26 scenario scenario 1 Source: World Economic Forum, Eurostat, Ellen MacArthur Foundation Source: World Economic Forum, Ellen MacArthur Foundation 3 May 2022 <2

Goldman Sachs GS SUSTAIN Source: Oxford Institute for Energy Studies, Circle Economy, Goldman Sachs Global Investment Research Most recyclable materials are still sent to landfills, resulting in significant opportunity costs. According to the World Bank, dry recyclables make up 38% of global waste, while compostables (food) make up an additional 44%. Of the remaining 18%, wood, leather and rubber (4%) can also be recycled/repurposed to avoid landfilling, leaving less than 14% of waste destined to be landfilled. Right now, however, 70% of global waste is sent to landfills or openly dumped. In the EU alone, ~180-190 million tonnes of steel, aluminum and plastics fall out of use in the EU economy, resulting in an estimated €87 billion in lost value every year (Material Economics). Improving circularity of key materials and reducing demand for virgin materials has the potential to cut CO2 emissions significantly. In Europe, materials recirculation, increasing product materials efficiency and circular business models for cement, aluminium, plastics and steel could reduce CO2 emissions 56% vs a baseline scenario of business as usual, according to Material Economics (Exhibit 16 ). Aluminium has the greatest differential in emissions saved from recycling, but an already high recycling rate means that the emissions-saving potential from reaching maximum recycling 3 May 2022 <3

Goldman Sachs GS SUSTAIN rates is lower than the potential for plastics, where only 9% of plastics are recycled (Exhibit 17). Mechanically recycled plastics are set to displace over 1.7 mn tonnes of virgin polymer feedstocks by 2030, up 147% from 2020 (according to S&P Platts). Recycled PET can save 60% of GHG emissions for every unit of virgin PET replaced, according to NAPCOR. Regarding steel, academic research suggests that 50% of steel production will still require virgin steel in 2050 to meet demand based on unchanged steel applications and corresponding lifetimes, as the accumulation of usable recycled material 3 lags demand for new uses. But a recycling rate of 62% and residence time of 17 years could lead to 60% of steel demand supported by recycling after 2070, a significant decline for virgin materials which could be further depressed with higher recycling rates. We take note of the recycling rates of a wide variety of materials below, where many are hypothetically 100% recyclable, including steel, aluminium, glass and copper. Other materials can only be downcycled, such as paper, textiles and plastics (mechanical), but are still not reaching their maximum circular potential (Exhibit 18). Exhibit 16: Increasing circularity for four key materials in Exhibit 17: Emissions reduction potential varies across Exhibit 18: Some metals have high recycling rates already, Europe could reduce CO2 emissions 56% vs business as materials, and current recycling rates also influence total while other materials like textiles and plastics have usual emissions reduction potential significant gaps EU Emissions reduction potential from a more circular economy, Emissions intensity of virgin vs. recycled materials in tCO2 per t Estimated global recycling rates for a collection of materials Mt CO2 per year material 600 14 13.5 100% EU: 74% 530 178 Structural steel Nearly 75% of US: 66% 500 2 / t produced in the aluminium Virgin Materials (left China: 47% ear 12 US contains 93% ever side) 80% y -56% t CO recycled steel produced is Recycled (right side) (%) 85% 400 Cement per 56 10 scrap, on still in use Rate 75% cannot be 62 average. today. 60% recycled, but 300 ling ~60% can be dioxide 234 production, 8Current EU steel 79% of plastic c recovered and 200 material production is created is in ecy40% 50% crushed for more than 60% landfills or littered Cement, in general, R reuse as arbon from 6 based on primary into the natural cannot be 40% aggregate c obal l 100 production. environment. Only conventionally G of 4 9% is recycled. recycled, though 20% Mt 0 2.4 some elements can 15% 2050 Baseline Materials Product Materials Circular Business 2050 Circular Emissions 2.3 be reused. 9% <1% 0% Recirculation Efficiency Models Scenario 2 0% 0.4 0.4 0.3 0.7 0.3 Cement Aluminium Plastics Steel 0 Steel Plastic Aluminium Cement Source: Material Economics, Data compiled by Goldman Sachs Global Investment Source: Material Economics, American Institute of Steel Construction, Aluminum Source: International Resource Panel, UN Climate Technology Centre & Network, UN Research Association, Goldman Sachs Global Investment Research Environment Programme, US EPA, Ellen MacArthur Foundation, Glass Packaging Institute, Copper Alliance, Company data, Goldman Sachs Global Investment Research 3 The length of time steel stays in a given use case before being repurposed, recycled, or disposed. 3 May 2022 <4

Goldman Sachs GS SUSTAIN Exhibit 19: Estimated global recycling rates for a collection of materials, along with other recycling facts Material Recycling Rates, Recyclability, and other Disposal Information Steel - Global recycling rate around 85% - Steel is 100% recyclable -9% of plastic produced since 1950 has been recycled Plastics -79% of plastic produced since 1950 has accumulated in landfills or the natural environment -Recycling efficiency is relatively low for plastic, meaning most recycling involves downcycling -Around 75% of aluminium ever produced is still in use today Aluminium -Global recycling efficiency rate is 76% -Recycled aluminium makes up 80% of US aluminium production Cement / Concrete -Cement alone cannot be recycled, but recovered concrete can be reused as aggregate Paper and Cardboard -Paper recycling inefficiency means that paper can only be recycled between 3 and 8 times -Europe's paper recycling rate stands at over 72%, while the US's rate stands around 68% Glass -Around 50% of glass, globally, is recycled -Glass is 100% infinitely recyclable -Good waste per year is around 30% for cereals, 40-50% for root crops, fruits and vegetables, 20% for oilseeds, Food / Vegetal Waste meat and dairy, and 30% for fish -One fourth of food currently lost or wasted could feed 870 million people in the world -15% of textile waste is recycled while 85% is incinerated or sent to landfills Textiles -Only 1% of textiles are recycled into new clothing every year -Garment usage has declined by 36% over the past 15 years Lithium -Less than 1% of lithium is recycled and recycled content for production input stands at less than 1% -Around 65% of copper produced over the last 100 years is still in use today Copper -Copper's global recycling rate stands around 40% -Copper is 100% recyclable Source: International Resource Panel, UN Climate Technology Centre & Network, UN Environment Programme, US EPA, Ellen MacArthur Foundation, Glass Packaging Institute, Company data, Goldman Sachs Global Investment Research 3 May 2022 <5

Goldman Sachs GS SUSTAIN Key hurdles and initiatives to achieving a Circular Economy An estimated $634-995 billion To tackle the gap between recyclability and actual recycling, a wide range of actions can help address challenges to circularity USD of investment is needed today. In order to accomplish circular economy goals, strategies to tackle waste, overconsumption and ecodesign must have between 2020-2040 to close technical feasibility, policy support and infrastructure capacity, where supporting infrastructure has capacity for maximum the plastics circularity gap - AFARA material flow. Using analysis from AFARA and Google on Closing the Plastics Circularity Gap as an example, we highlight the top interventions that can be useful for improving the circularity of plastics and other materials such as paper and cardboard, aluminum, copper, and others (Exhibit 20). Exhibit 20: Top interventions reducing the Plastics Circularity Gap in 2025, 2030, and 2040 Timeline Interventions Key Outcomes Examples Increase accessibility and convenience of collection by providing consumers with new programs/services to Adding public bins/receptacles Collection Programs / Services increase collection rates Emptying bins in a timely manner Offering pickup of recycling in residential and commercial areas Consumer Incentives to reuse and recycle plastic Provide consumers with incentives, including monetary / loyalty / social rewards to shift towards reuse and Providing a discount when consumers bring their own cup/bag correct recycling Consumer Incentives to reduce plastic consumption Provide consumers with incentives/disincentives, including monetary/loyalty/social rewards, to encourage a shift Setting a fee on plastic bags toward reuse and correct recycling Provide consumers with knowledge to improve plastic management through reuse and recycling correctly Sharing positive sustainable impacts Education and Awareness on reusing and recycling Launching local education and awareness campaigns Top Empower consumers to promote proper plastic management among others Interventions Provide consumers with knowledge to change plastic consumption behaviour by eliminating virgin plastics or by 2025 Education and Awareness on reducing consumption reducing plastic use Increasing participation in consumer-led movements Empower consumers to promote a change in plastic consumption behaviour Inventory Management Eliminate pre-consumer plastic waste, like product destructions due to quality issues, product losses during Optimizing delivery cycles based on consumer shopping habits transportation, unsold products due to excess inventory, unsold products due to shelf life expiration, etc. Increase the capacity and quality of the collection network to manage a higher throughput of plastic volumes Retrofitting/building material recovery facilities (MRFs) and transfer stations Mechanical Recycling System Optimizing optical sensors Improve the sortation system to increase the quality and purity of raw materials for recycling (i.e. clean and Integrating artificial intelligence/machine learning to recognize waste streams homogenous bales) and patterns Top Redesign products and packaging to minimize use of plastics Minimize the number of polymers used in a package or product Interventions Design for Recyclability Reduce complexity and barriers to recycling Minimize the amount of inks used by 2030 Eliminate small/loose materials Design for fit with regional recycling infrastructure Leverage novel additives that improve recyclability Expand the collection system with a network of infrastructure to increase capacity for managing throughput of Developing new polyethylene to ethylene monomer technologies plastic volumes Top Chemical Recycling Increase purity of raw materials for recycling by improving the sortation system Standardizing the definition of recycled content to include plastics derived from Interventions Improve and develop polymer-to-polymer recycling technologies chemically recycled feedstocks by 2040 Reduce barrier to entry for chemical recycling through clear regs Plastics Tax Encourage industry to minimize the use of virgin plastics throughout pricing signals Setting a tax on all virgin plastic production Plastics Substitution Substitute plastics with a material that has better environmental impacts and improved end of life than virgin Substituting plastics with edible packaging plastics Reverse Supply Chain Provide consumers convenient collection program for end-of-life plastics directly back to the manufacturer to Offering pick up of recycling with product delivery Deprioritized encourage reuse Interventions Enforce industry to minimize the use of plastics through regulations and bans Setting a standard for minimum recycled content Plastics Reduction Policy Mandating mono-material products Provide industry with resources to adapt to changes Banning certain plastic types Providing directories for recycled content suppliers These are split by solutions that are targeted/feasible by 2025, 2030 and 2040 based on maturity and readiness to deploy. Grey shaded solutions overlap impact from other solutions Source: AFARA, Google, Data compiled by Goldman Sachs Global Investment Research 3 May 2022 <6

Goldman Sachs GS SUSTAIN Still, there are nuances to the benefits, challenges and implications of recycling. In the path to circularity, many alternatives to recycling offer increased material, energy and or emissions savings — reusing goods and materials prevents any inefficiencies from the recycling process, and reducing consumption of goods and services to begin with minimises the material and emissions associated with production, regardless of whether virgin or recycled materials are used. Recycling often reduces the energy required to manufacture products: recycling cardboard takes 75% of the energy required to manufacture new cardboard; recycling plastic takes 84% less energy than making it from raw materials. And on average, it costs 44% less to recycle trash than send it to landfills, and between 54% and 60% less to recycle trash than to incinerate it, according to Recycling Revolution. Despite these benefits to recycling, there may be some balancing required between these and the benefits of single-use items, most notably plastics. Sending 1kg of food waste to landfill has a similar carbon footprint to landfilling 25,000 500ml plastic bottles, so if single-use plastic can extend the useful life of food and prevent food waste, it can often, 4 on a relative basis, be net beneficial to both waste and carbon emissions. In addition, recycled PET, in a recent study , was discovered to leach more toxic chemicals into water bottles than bottles made with virgin plastic. In addition, single-use plastic bottles made of virgin materials are less energy and emissions intensive than making one reusable bottle, though these benefits reverse after sufficient reuse. One stainless steel water bottle requires seven times as much fossil fuel, releases 14 times more GHG emissions, requires many more metal resources, and has higher risk to biodiversity than one single-use plastic bottle. But if reused 50 times, it is climate positive relative to a plastic bottle, and if used 500 times is better on environmental-impact categories - requiring fewer fossil fuels, releases fewer emissions, requires fewer material resources and has lower risk to biodiversity. Recycling economic bottlenecks and headwinds generally come from feedstock availability and, in the case of chemical recycling, supply chain, economies of scale, technology and capex. Demand for recycling comes from the downstream tailwinds (social perception, policies and incentives) that over time should offset some of the headwinds in the production process to make a circular economy more economically viable than a linear one. The table below highlights some key areas throughout the value chain where recycling and linearity have different challenges and benefits. 4 Gerassimidou, S., Lanska, P., Hahladakis, J., Lovat, E., Vanzetto, S., Geueke, B., Groh, K., Muncke, J., Maffini, M., Martin, O., Iacovidou, E.. (2022). Unpacking the complexity of the PET drink bottles value chain: A chemicals perspective. 10.1016/j.hazmat.2022.128410. 3 May 2022 <7

Goldman Sachs GS SUSTAIN Exhibit 21: Mechanical and chemical recycling have a number of economic bottlenecks in the upstream and manufacturing stages, but see more tailwinds downstream Economic Drivers for the Linear and Circular Economy Circular Economy Economic Drivers Favorable Conditions Linear Mechanical Chemical Economy Recycling Recycling Feedstock Availability Easy access and proximity to feedstock tream Minimal pre-treatment requirements Ups Feedstock Cost Low cost of Feedstock Low volatility of feedstock prices Supply Chain Integrated supply chain Economies of Scale Large scale/high capacity Mature and robust technology capable of Technology accepting flexible feedstock High efficiency and yield Plastic and Resin ManufacturingCapExLower capital investment Favorable depreciation and lending OpEx Low energy and water requirements Polymer Price High value output products tream Social Perception Promotes circularity and use of recycled / Other content Downs Policy / Incentives Recycling and/or circularity subsidies Comprehensive definitions of recycling Headwind Neutral Tailwind Source: AFARA analysis, Goldman Sachs Global Investment Research Investable Ideas and companies investing for a Circular Economy We highlight 19 companies that we see as aligned to the seven key components of circularity. While these are mapped to one circular theme, most of these companies contribute to many of these themes, again reiterating the interlinking nature of these themes all working together towards net zero waste. 3 May 2022 <8

Goldman Sachs GS SUSTAIN Select companies mapped to the 7 Circular Economy solutions Source: Goldman Sachs Global Investment Research, Company data 3 May 2022 <9

Goldman Sachs GS SUSTAIN Exhibit 22: Circular Economy / Recycling projects and recent expansions from select companies Material Company Project Overview US: In Michigan, Hydro will invest in the construction of a new aluminium recycling plant producing 120,000 tonnes of aluminium extrusion ingot per year. The site is set to start production of Hydro CIRCAL in 2023. EU: Aluminium Norsk Hydro Norway: Hydro will invest NOK 105 mn to establish Høyanger Recycling, a dedicated aluminium recycling facility located by the HydroHøyanger primary aluminium smelter. Hungary: Hydro will build a new aluminium remelt facility, at Hydro’s aluminium extrusion plant in SzekesFehervar with an annual capacity of 90,000 tonnes. In addition, Hydro is increasing the capacity for its Rackwitz recycling plant in Germany and Clervaux plant in Luxembourg. UK: Hydro is investing £2.4 mn in its Deeside recycling plant in the UK to increase the aluminium recycling capacity to 70,000 tonnes per year. Fortum Will invest c. €24 mn to expand its lithium-ion battery recycling capacity by building a new hydrometallurgical plant in Finland. The new facility will recover scarce metals from old EV lithium-ion batteries while also recycling various waste fractions derived throughout the battery supply chain. Umicore Umicore and Automotive Cells Company announced April 27, 2022 a long-term strategic supply agreement for EV cathode materials, where Umicore will supply ACC's future large-scale European battery plants with next-generation high nickel cathode materials, with first Battery commercial volumes expected in early 2024. Johnson Johnson Matthey partnered with Stena Recycling and European Metal Recycling to develop an efficient lithium-ion battery and cell materials recycling value chain in Europe. The company is developing processes to produce fully refined materials for lithium-ion batteries, Matthey looking to increase recycled content in new batteries. Stena Metall Investing SEK 250mn into a new battery recycling facility in Halmstad, which can recycle 95% of a lithium-ion battery. In operation: 25 Waste-To-Energy (WTE) facilities; 1 Organic Waste Treatment facility; 8 Resource Recycling projects Zheneng Treatment Capacity: 40,410 tons/day Jinjiang Under Construction & Expansion: Environment 3 WTE facilities; 1 Resource Recycling projects General Holding Treatment Capacity: 3,100 tons/day waste In Preparation: 18 WTE facilities and Kitchen Waste Treatment projects; 1 Resource Recycling project Treatment Capacity: 14,645 tons/day Huazhang Investing up to HK$100 mn to fund the waste recycling plants in Dubai. Technology Shanaya As of end of 2021, the group invested U$2.72 mn in integrated recycling plant for general waste handling and oil waste handling. Ambev Investing 870 mn Reais (c. U$154 mn) in a new sustainable glass plant in Paran, which will have the capacity to produce bottles from recycled or broken glass, collected in partnership with local companies and organizations specializing in reverse logistics. Glass Vetropack Invested in the expansion of glass recycling facilities in the Czech Republic and Austria. Aurubis Investing c. €300 mn in a new recycling plant in Georgia. The project is expected to process ~90,000t of complex recycling materials after its completion in 2024. Metals Invested c.€84m into two EAFD recycling plants in China, with a combined capacity to recycle 220kt EAFD p.a. Befesa One has contracted EAFD for >80% plant utilisation in 2022; the other one is expecting commercial output H2 ’22. OMV Building a chemical recycling demo plant based on its proprietary ReOil® technology. The plant has a capacity of 16,000 t p.a. Eurocell Between 2016 and 2021, Eurocell invested £6.3 mn to expand Eurocell Recycle Midlands site, to increase output and improve reliability. The company acquired Eurocell Recycle North for c. £6 mn and made post-acquisition investment of £4.5 mn. Coca-Cola Increasing onshore recycling capacity by investing in joint venture PET recycling plants in Australia and Indonesia. In Australia alone, the two new plants will build a combined annual capacity of 40,000 tonnes. INEOS Investing into a pilot plant for advanced recycling of polystyrene in the UK. It is expected to be operational in H2 '22. Styrolution Chemicals BASF By 2030, BASF will invest up to €4.5 bn in battery materials and recycling. & Plastics BASF, Quantafuel and REMONDIS partnered up on a joint investment into a pyrolysis plant for plastic waste. Alfa Invested U$96 mn in the acquisition of CarbonLITE’s PET recycling and pelletizing plant in Pennsylvania, which enables the production of food-grade pellets required for bottle-to-bottle recycling. Alpla Announced investment of c. €50 mn a year in expanding Alpla's recycling activities between now and 2025. In 2021: Eastman invested U$250 mn to expand the capacity of its molecular recycling facility, which uses >110,000 metric tons of waste plastic as raw material. Construction is expected to be mechanically complete by end 2022. Eastman Chemical In 2022: the company announced that it will invest up to U$1 bn in a material-to-material molecular recycling facility in France, where the company’s polyester renewal technology could be used to recycle up to 160,000 metric tonnes of hard-to-recycle plastic waste annually. Textile Zorlu Invested U$10 mn in Polymer Recycling Plant in Europe, and started producing polyester yarn completely out of plastic bottles. Used fuel Orano Orano is investing over €80 mn in its Melox recycling plant that produces Mox fuel assemblies made from a blend of uranium oxide and plutonium developed from spent fuel. They are intended to supply light water reactors for electricity production. Source: Company data 3 May 2022 20

Goldman Sachs GS SUSTAIN The EU Taxonomy - a potential catalyst to the Circular Economy The Platform on Sustainable Finance released its final report on the next four environmental objectives of the EU Taxonomy, covering 56 activities under water, waste & the circular economy, pollution prevention and control, and biodiversity. Circular activities are a big winner of the next phase of the Green Taxonomy, capturing 21 of 56 activities (Exhibit 23), as spare parts manufacturing, servicing or repairing, recycling, products-as-a-service, and second-hand goods, among others, are due to gain greater recognition. New industries not previously covered under the current Climate Taxonomy include apparel and footwear, food and beverage, aircraft manufacturing, passenger and freight air transport, furniture manufacturing, plastic packaging, and animal and crop production. We see circularity being a focal environmental objective alongside climate change mitigation in thematic investor decision-making. Investor attention towards tracking and following the EU Taxonomy will be unavoidable for ESG funds. The ambitions of the European Commission are to establish the Taxonomy as the definitive ‘green label’ to help capital markets facilitate the flow of capital towards sustainable outcomes. The EC must, by law, embed the Taxonomy criteria into all future relevant regulation, investment fund labels and standards, and will feature heavily in upcoming MiFID II amendments that will further catalyze the growth of sustainable investment funds, in our view. We see the Taxonomy leading to significant implications for capital flows, cheaper cost of capital and higher valuations for companies that fit into the Taxonomy — which will have significance to global ESG and generalist investors. As market sentiment potentially shifts towards supporting ESG improvers, the Taxonomy could help provide basis for owning companies in transition. Thus the Taxonomy could reshuffle the balance of what gets owned in ESG funds - presenting opportunities for ESG ‘value’ or ‘momentum’ strategies where companies require significant transition financing. Sectors originally left out or not in scope of the initial climate change activities of the Taxonomy may see renewed focus after being included under the new objectives, including manufacturing of clothing, manufacturing of food and beverages, all civil engineering activities and road maintenance, and waste services. Based on our ESG fund holdings analysis, many of these sectors are currently underweight in ESG funds, including Beverages (-29%) and Transport Infrastructure (-14%). These industries will be pivotal to accomplish climate, circularity and pollution prevention goals, and will now in whole or partially be recognized as ‘green’ under the Taxonomy where meeting the strict criteria, which could improve their investability among ESG funds. Gauging companies taxonomy-aligned capex will be critical for assessing future revenue exposures and could support ESG improver/momentum strategies. 3 May 2022 2<

Goldman Sachs GS SUSTAIN Exhibit 23: New Taxonomy-eligible activities for the circular economy environmental objective connect to the critical components of a circular economy in a variety of ways Eligible activities under the EU Taxonomy for the circular economy mapped to the seven critical components of a Circular Economy Source: Goldman Sachs Global Investment Research The Climate Taxonomy recognizes the interconnection of the circular economy and GHG emissions savings - giving dual credit for circular economy solutions in many cases. The following activities can receive dual credit under both the climate change mitigation and circular economy objectives of the Taxonomy: 3 May 2022 22

Goldman Sachs GS SUSTAIN n Manufacturing of plastics in primary form - has provisions for both mechanical recycling, chemical recycling, and or renewable feedstock. n Manufacturing of biogas / biofuels - has provisions for anaerobic digestion of organic material (eg. food waste). n Anaerobic digestion or composting of sewage and bio-waste. n Landfill gas capture and utilisation. n Collection and material recovery from non-hazardous waste - captures both collection and recycling activities. n Maintenance and repair of low carbon / energy efficient technologies for buildings and renewables. New circular economy activities expand coverage of existing Taxonomy. With the addition of the 21 new circular economy activities, company eligibility coverage increased from 62% of MSCI ACWI under just Climate Change Mitigation to now 73% (with revenues >5% eligible). While data currently remains sparse for measuring alignment to the Circular Economy technical screening criteria, alignment stayed at 12% of the MSCI ACWI given that many recycling covered under the Circular Economy activities are also covered under Climate Change Mitigation as described above (Exhibit 24). Exhibit 24: Over half of global companies have some exposure to the EU Taxonomy, with Exhibit 25: Some of the most underweight industries in ESG funds have portions of revenue only 12% potentially aligned under Climate Change Mitigation and 1% under Circular that are eligible under the Taxonomy Economy (>5% rev.) GICS 3 industries most relatively underweight in ESG funds, Mar 2022, with avg. eligible revenue % MSCI ACWI exposure by GICS 1, >5% rev potentially eligible/aligned under CCM, CE and combined in exposed sectors 0% -20% Relativ 20% 87% 44% 13% 97% 96% 88% e 65% -40% 86% u 62% n 88% 82% d e 37% r w 55% -60% eigh 91% 41% t 16% Climate Change Mitigation (CCM) pot. eligible exposure -80% % Circular Economy (CE) pot. eligible exposure Avg pot. eligible revenue % in sector to CCM or CE -100% Source: European Commission, Goldman Sachs Global Investment Research Source: Morningstar, Goldman Sachs Global Investment Research 3 May 2022 23

Goldman Sachs GS SUSTAIN Europe Future of Food: Digesting the EU Taxonomy In December, our European Consumer Staples sector team partnered with GS SUSTAIN to discuss the six environmental objectives of the Taxonomy and their relevance to Consumer Staples, particularly under the transition to a circular economy and the protection of biodiversity. Under the initial draft of the remaining four objectives released in August 2021, the team examined how European Food companies under scope screen on both an eligibility and alignment basis based on their interpretations of the Taxonomy technical screening criteria, and leveraging the currently available disclosures from covered companies. While the newest release of the Technical Screening Criteria for the remaining four objectives is not identical to the draft from August 2021, the alignment criteria for food and beverage remained the same. It is hard to draw exact conclusions given inconsistency in company reporting, but the team tried to assess where the most progress on achievement of the Taxonomy criteria has been made, the biggest challenges ahead, and limitations of the EU Taxonomy proposals for the CPG space. Food manufacturing companies will have to comply with rules covered under the protection and restoration of biodiversity and ecosystems and transition to a circular economy. The team assessed the alignment to the Taxonomy criteria by identifying the proportion of raw materials defined as sustainably sourced and the proportion of packaging made up of recycled content. These disclosures are not uniform, and may not always meet the full criteria needed to be aligned with the EU taxonomy, but these figures still offer insight with respect to the relative performance of each business. Updates to our EU Taxonomy Tool Our updated GS SUSTAIN EU Taxonomy Tool expands our mapping of 1,700 unique revenue segments to the 21 circular economy activities (in addition to the already-mapped 90+ climate change mitigation and adaptation (where relevant) activities) defined in the platform’s final report for the next four Environmental Objectives, and assess alignment where feasible. We also now incorporate company reported Taxonomy eligibility and alignment figures for climate change mitigation where available. Our Taxonomy eligibility and alignment framework covers >7,000 global companies where ~4,300 have some potentially eligible revenue and >700 companies have some potentially aligned revenue. 3 May 2022 24

Goldman Sachs GS SUSTAIN Conducting alignment tests for the circular economy remains difficult - Currently available data from companies is often not sufficient to test companies’ alignment to the technical screening criteria today, leaving many companies as eligible, but requiring more information to assess full alignment. For example, food and beverage companies selling product in packaging made up of 95% recycled material can claim revenue as aligned (green) under the new criteria; however, very few companies report this information at a product level or only report figures on an aggregated basis with percentages significantly lower than the 95% threshold - Read Europe Future of Food: Digesting the EU Taxonomy. Currently we can only qualify companies as aligned where business models clearly meet the technical screening criteria as is, such as sale of second-hand goods or ‘recycling equipment manufacturers, ‘products as a service, etc. We note that the activities and criteria released for the Circular Economy should be viewed as provisional as they are not yet “nalised by the EU Commission and published in the Of“cial Journal. Exhibit 26: List of circular economy activities that meet the technical screening criteria as is and example of RBICS mapping to Taxonomy activities List of Taxonomy-defined economic activities under circular economy that can likely align directly to the technical screening criteria RBICS Revenue Segments Primary Taxonomy Circular Economy Activity Category Activity already meets technical screening without further tests? Recycling Services Sorting and material recovery of non-hazardous waste Y Other Waste Services Remediation activities for the transition to a circular economy Y Wastewater Treatment Services Phosphorus recovery from waste water Y Environmental Services Remediation activities for the transition to a circular economy Y Soil Remediation Remediation activities for the transition to a circular economy Y Wastewater Residual Management Phosphorus recovery from waste water Y Solid Waste Recycling Equipment Manufacturing Sorting and material recovery of non-hazardous waste Y Manufacturing Industry Software Product-as-a-service and other circular use- and result-oriented service models Y-With circular biz. model check Machinery, Equipment and Supplies Distributors Repair, refurbishment and remanufacturing, and sale of spare parts Y-With circular biz. model check Maintenance/Repair/Overhaul Supplies Distributors Repair, refurbishment and remanufacturing, and sale of spare parts Y-With circular biz. model check Metal Recycling Providers Sorting and material recovery of non-hazardous waste Y Other Metal Processing and Recycling Providers Sorting and material recovery of non-hazardous waste Y-With circular biz. model check Computer Aided Design (CAD) Software Product-as-a-service and other circular use- and result-oriented service models Y-With circular biz. model check Software Design and Engineering Consulting Product-as-a-service and other circular use- and result-oriented service models Y-With circular biz. model check Source: Platform for Sustainable Finance, Goldman Sachs Global Investment Research 3 May 2022 25

Goldman Sachs GS SUSTAIN Other circularity regulations impacting corporates: Circularity regulation is increasing across global jurisdictions as focus on sustainability continues to push beyond decarbonization through energy. Expanding from our discussion on the Circular Economy Wave Coming to Europe, we outline a few examples of circularity-focused regulations and legislation being implemented around the globe with potentially significant implications for corporates. This non-comprehensive list is just the start to circularity regulations, and momentum behind legislative efforts is and will continue to pick up as public focus on waste grows. Exhibit 27: Example regulations and legislation related to key circular economy components and themes Source: Goldman Sachs Global Investment Research 3 May 2022 26

Goldman Sachs GS SUSTAIN Our GS SUSTAIN ESG Framework - how we can help GS SUSTAIN can provide access to proprietary tools and resources to quantify impact and identify ESG Improvers, enabling greater recognition of underappreciated opportunities across sectors. Our expanded offering of SUSTAIN tools can help investors to answer a myriad of ESG questions at the portfolio and security levels, enabling more systematized and quantitative reporting while providing detailed and transparent data sets for idea generation, security selection and corporate engagement. n Our multi-pronged SUSTAIN scoring framework can help provide greater granularity and objectivity for asset managers in both security selection and reporting. The framework across >7,000 companies includes our recently introduced Product Alignment framework, based on the SDGs, EU Taxonomy and GS analyst views, and can help investors cast a wider net in the search for impact winners aligned to less obvious sustainability themes. Existing pillars detail performance around sector-specific environmental and social operational metrics, governance, and controversies. n Forward-looking estimates. Looking ahead, we believe investment performance will be more driven by future change and have taken our first steps toward incorporating forward-looking estimates in our proprietary industry analyst inputs which now include sustainable product revenue and capex in select industries. Of more than 3,000 companies under GS coverage, 53% saw a change in net E&S scores as a result of our analyst survey inputs. Furthermore, we have taken first steps to offering quantitative forecasts of sustainable product revenue/capex for ~650 companies in 19 industries. We now add Scope 1 and 2 greenhouse gas emissions for a smaller segment of companies in 7 sectors. n EU Taxonomy revenue alignment. We see the EU Taxonomy as one of the most seminal regulatory developments driving standardization in reporting for both corporates and asset managers. Our EU Taxonomy alignment tool maps companies’ revenues to Taxonomy-defined activities to determine potential Taxonomy-eligible and aligned revenue based on technical screening checks where data exist, and “Do No Significant Harm” (DNSH) and “Minimum Social Safegards” (MSS) criteria. n SDG revenue alignment. The UN Sustainable Development Goals (SDGs) have emerged as one of the most commonly used frameworks for taxonomizing impact across a broad set of sustainability challenges. Our SDG alignment tool employs granular revenue data, GS analyst inputs and other company metadata to map alignment, exposure and misalignment to ten of the SDGs we deem to be most investable. o Company mapping for SDG 12: Responsible Consumption & Production: Our SDG 12 screen targets companies advancing the circular economy or reducing the environmental impact of commonly used materials, logistics and shipping businesses, and companies that offer waste management, pollution control, maintenance, recycling, rental or reuse services or the equipment or machinery used in these services. Recycling facilities, 3 May 2022 27

Goldman Sachs GS SUSTAIN companies that produce RFID devices, recycling equipment and machinery, pollution control equipment, recyclable materials and companies that offer hazardous waste collection & treatment and environmental engineering & consulting services are considered aligned. Otherwise, to be aligned a company must have >10% clean energy revenue based on BNEF data, eco-design products or take-back initiatives. If the company is in paper & packaging, it must have labeled wood products. If the company is in the auto parts, brands, consumer durables, household & personal care or chemicals sectors, the company must have eco-design products and sustainable packaging or take-back initiatives. n ESG fund ownership. Aggregating fund holdings across a universe of ~3,000 ESG funds we analyze this pool of ESG assets to better understand trends in ESG ownership at both the sector and company level. The full dataset provides absolute and momentum ESG ownership detail for well over 10,000 securities. n ESG fund flows, valuations and performance. Our ESG Tracker series analyzes the aforementioned ESG fund universe to gauge ESG fund flow momentum and sizing relative to the broader market, breaking out differences by strategy, fund type and fund style. The tracker also examines valuation and performance across categories. 3 May 2022 28

Goldman Sachs GS SUSTAIN Source: Goldman Sachs Global Investment Research 3 May 2022 29

Goldman Sachs Disclosure Appendix Reg AC We, Evan Tylenda, CFA, Madeline Meyer, Grace Chen, Georgina Fraser, Ph.D., Ajay Patel, Brian Singer, CFA, Derek R. Bingham, Sharmini Chetwode, Ph.D., Rachit Aggarwal and Emma Jones, hereby certify We also certify that no part of our compensation was, that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. esearch division. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment R GS Factor Profile The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market (i.e. our coverage universe) and its sector peers. The four key attributes depicted are: wth, Financial Returns and Multiple are calculated by using normalized ranks Growth, Financial Returns, Multiple (e.g. valuation) and Integrated (a composite of Growth, Financial Returns and Multiple). Gro vant attribute. The precise calculation of each metric may vary for specific metrics for each stock. The normalized ranks for the metrics are then averaged and converted into percentiles for the rele depending on the fiscal year, industry and region, but the standard approach is as follows: wth company. Growth is based on a stock’s forward-looking sales growth, EBITDA growth and EPS growth (for financial stocks, only EPS and sales growth), with a higher percentile indicating a higher gro y with higher financial returns. Multiple is Financial Returns is based on a stock’s forward-looking ROE, ROCE and CROCI (for financial stocks, only ROE), with a higher percentile indicating a compan ks, only P/E, P/B and P/D), with a higher percentile indicating based on a stock’s forward-looking P/E, P/B, price/dividend (P/D), EV/EBITDA, EV/FCF and EV/Debt Adjusted Cash Flow (DACF) (for financial stoc a stock trading at a higher multiple. The Integrated percentile is calculated as the average of the Growth percentile, Financial Returns percentile and (100% - Multiple percentile). wth uses inputs for the fiscal year at least seven quarters in the future Financial Returns and Multiple use the Goldman Sachs analyst forecasts at the fiscal year-end at least three quarters in the future. Gro compared with the year at least three quarters in the future (on a per-share basis for all metrics). For a more detailed description of how we calculate the GS Factor Profile, please contact your GS representative. M&A Rank Across our global coverage, we examine stocks using an M&A framework, considering both qualitative factors and quantitative factors (which may vary across sectors and regions) to incorporate the verage from 1 to 3, with 1 representing high (30%-50%) probability of potential that certain companies could be acquired. We then assign a M&A rank as a means of scoring companies under our rated co the company becoming an acquisition target, 2 representing medium (15%-30%) probability and 3 representing low (0%-15%) probability. For companies ranked 1 or 2, in line with our standard ore does not factor into our price target, and may or may not be departmental guidelines we incorporate an M&A component into our target price. M&A rank of 3 is considered immaterial and theref discussed in research. Quantum Quantum is Goldman Sachs’ proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets. 3 May 2022 30

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United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Conduct Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request. European Union and United Kingdom: Disclosure information in relation to Article 6 (2) of the European Commission Delegated Regulation (EU) (2016/958) supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council (including as that Delegated Regulation is implemented into United Kingdom domestic law and regulation following the United Kingdom’s departure from the European Union and the European Economic Area) with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest is available at which states the European Policy for Managing Conflicts of Interest in Connection with Investment Research. 3 May 2022 31

Goldman Sachs Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer registered with the Kanto Financial Bureau under registration number Kinsho 69, and a member of Japan Securities Dealers Association, Financial Futures Association of Japan and Type II Financial Instruments Firms Association. Sales and purchase of equities are subject to commission pre-determined with clients plus Association or the Japanese Securities Finance consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Company. Ratings, coverage universe and related definitions Buy (B), Neutral (N), Sell (S) Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a stock’s ated, Coverage total return potential relative to its coverage universe. 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The previous investment rating and target price, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs an in has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded. Global product; distributing entities The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs on a global basis. Analysts based in Goldman Sachs offices around the h is disseminated in Australia by Goldman Sachs world produce research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. 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General disclosures This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst’s judgment. 3 May 2022 32

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Any such trading strategies are distinct from and do not affect the analyst’s fundamental equity rating for such stocks, which rating reflects a stock’s return potential relative to its coverage universe as described herein. y or sell, the securities or We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and bu derivatives, if any, referred to in this research. hs, do not necessarily refl The views attributed to third party presenters at Goldman Sachs arranged conferences, including individuals from other parts of Goldman Sac ect those of Global Investment Research and are not an official view of Goldman Sachs. ve positions in the products mentioned that are inconsistent with the Any third party referenced herein, including any salespeople, traders and other professionals or members of their household, may ha views expressed by analysts named in this report. 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For researc markets or asset classes (including related services) that may be available to you, please contact your GS representative or go to Disclosure information is also available at or from Research Compliance, 200 West Street, New York, NY 10282. © 2022 Goldman Sachs. ior written consent of The Goldman Sachs Group, Inc. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the pr 3 May 2022 33

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