Goldman Sachs GS SUSTAIN: ESG of the Future PM Summary ESG of the Future represents the shift we see from predominantly backwards-looking ESG metrics towards integrating a forward view „ we now add forecasts for select corporate Scope 1 and Scope 2 emissions. We see ESG investor focus on corporate decarbonization continuing to become more forward-looking due in part to new rules proposed by regulators in the US, Europe and Asia as well as a broader thematic investor shift From Aspiration to Action, further accelerated by the Russia/Ukraine war. We add greenhouse gas emissions to our forecasting tools to help investors consider the medium term direction of Scope 1 and 2 emissions on a macro and micro basis for companies in critical sectors. This should further help to identify ESG Improvers, complementing our forecasting tools for Green Revenue mix, Green Capex mix and select volumetric mix shifts (electricity generation, autos, steel, etc) introduced in our November 2021 ESG of the Future report. Macro and micro bottom line. While our new greenhouse gas forecasts do not paint a full picture of overall emissions, our forecasts imply Scope 1 emissions from companies in seven historically high-emitting sectors will remain below 2019 levels through 2025, implying a 1%-2% annualized decline vs. a 2019 base. Emissions intensity is declining for each of the sectors we forecast, though there is no sector where the percentage reduction in emissions intensity through 2025 appears consistent with a path to a 1.5°C temperature rise (laid out by our colleagues Carbonomics analysis) for covered companies. Emissions intensity is declining at the fastest pace for Electric Utilities and Oil & Gas Producers by 2025 vs. 2019 (intensities are referred to Scope 1 for Electric Utilities and Scope 1+2 for Oil & Gas Producers). 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 regulation, new sustainability bond issuance, focus on whether we are on track to meet key UN Sustainable Development Goals like decarbonization and understanding supply chain risks. Our November 2021 ESG of the Future report laid out analysts forecasts for companies in 19 sectors for Green R evenue mix, Green Capex mix and select key volumetric indicators in an effort to track mix shift towards sustainable use case alignment, Green Capex and how transformational sectors like autos and power generation will become. As we highlighted, this was a first step given in part limited disclosures and basis for forecasting. In this report, we take a first step at integrating forecasts for greenhouse gas emissions. We believe this will also become more in focus for both macro and micro reasons — to determine how companies are aiding the decarbonization effort and whether companies are on track to meet targets. We have asked analysts to forecast their covered companies Scope 1 and Scope 2 emissions annually in seven historically high-emitting sectors — Airlines, Chemicals, Construction Materials, Mining & Metals, Oil & Gas, Steel and Utilities. Together Scope 1 emissions from these sectors in 2019 represent 89% of overall Scope 1 emissions from the near 7,000 companies in our GS SUSTAIN database. As we discuss further, we