GS SUSTAIN: ESG of the Future

Note: The following is a redacted version of the original report published May 2, 2022 [73 pages]. Research EQUITY RESEARCH | May 2, 2022 | 2:04AM EDT ESG of the FUTURE A forward look at corporate greenhouse gas emissions, potential ESG Improvers We expect increased focus on corporate emissions of greenhouse gases as ESG markets become more forward-looking and in response to both rising regulations including proposals from the SEC and carbon pricing considerations. Following the introduction of our analysts' estimates for Green Capex and Green R e introduce our analysts' estimates for Scope 1 and 2 evenue in 2021, w greenhouse gas emissions for select companies in seven critical sectors. Our forecasts through 2025 imply that corporate emissions will remain below 2019 levels, but the reduction in corporate emissions intensity does not appear consistent with a path that limits global temperature rise to 1.5°C – as laid out in the Carbonomics analysis. We expect an ESG investor shift From Aspiration to Action to lead to valuation premiums over time for leaders in corporate decarbonization with favorable corporate returns. Brian Singer, CFA Enrico Chinello, Ph.D. Michael Hao Wu, CFA Derek R. Bingham +1 212 902-8259 +1 212 357 3398 +1(917)343-1137 | +1 415 249-7435 [email protected] [email protected] [email protected] [email protected] Goldman Sachs & Co. LLC Goldman Sachs & Co. LLC Goldman Sachs & Co. LLC Goldman Sachs & Co. LLC Evan Tylenda, CFA Sharmini Chetwode, Ph.D. Brendan Corbett Emma Jones Madeline Meyer +44 20 7774-1153 +852-2978-1123 +1(415)249-7440 +61 2 9320-1041 +44(20)7774-4593 [email protected] [email protected] [email protected] [email protected] [email protected] Goldman Sachs International Goldman Sachs (Asia) L.L.C. Goldman Sachs & Co. LLC Goldman Sachs Australia Pty Ltd Goldman Sachs International Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the “rm 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 certi“cation and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US af“liates are not registered/quali“ed as research analysts with FINRA in the U.S.