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 www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S. The Goldman Sachs Group, Inc.