Goldman Sachs GS SUSTAIN: ESG of the Future Green Capex mosaic provides opportunities to reduce corporate emissions and consumer emissions We continue to believe Green Capex will be the multi-year secular theme driving the next wave of infrastructure as focus rises to decarbonize the world „ in addition to meet Clean Water and Infrastructure goals. As we detailed in our Green Capex: Making Infrastructure Happen report, we see the need for $2.8 trillion incremental annual investment on average this decade vs the 2016-20 average on path towards Net Zero, Infrastructure and Clean Water goals. As a result, Green Capex would need to step up to a total of $6 tn annually in the 2020s. Green Capex for those three focus areas has been about $3.2 trillion annually within 2016-2020, which represents about 15% of average global gross capital formation during 2016-19. Incremental Green Capex will be needed from a combination of governments, private companies and public companies, and will involve, in our view, an all-in approach across multiple sectors that will be critical or needed on path to Net Zero, Infrastructure and Clean Water goals (see Exhibit 16). Net Zero goals will require annual investments to step up to $3.0 trillion annually and will involve multiple technology verticals, in our view. We expect achieving Net Zero goals will require a step-up in investments to $3.0 tn annually in the 2020s, up $1.8 tn from the 2016-2020 annual average of $1.2 tn. In our view, Green Capex needed on path to Decarbonization goals will embrace multiple technology verticals, from generation — e.g., Renewables, among others — to utilization — e.g., Electrification, among others. In addition, as detailed in Exhibit 16 , we also see mitigation — such as Carbon Capture Utilization & Storage — as well as energy storage technologies — e.g., Hydrogen and Battery Storage — as instrumental on path to Net Zero goals, to balance intermittency in energy supply from renewables assets. We believe higher commodity prices could strengthen investor focus on energy reliability, particularly on Hydrogen and Energy Storage. As we recently described in our Supply-driven oil price spike: Sustainability implications report, we believe rising commodity prices could accelerate technology innovation and/or fuel transition — similarly to past spikes in oil price. While we do not view an inflationary commodities environment hampering Green Capex growth, we anticipate heightened focus on energy reliability and storage, potentially. Additional catalysts could be recent temporary power outages in major economies worldwide — namely, Texas, California, Europe and China — and the ongoing Russia/Ukraine conflict. The incorporation, in a limited way, of natural gas and nuclear into the EU Taxonomy at the beginning of 2022 is recognition of the need for Energy reliability to complement transition to clean energy. As such, we see Battery Storage and Hydrogen likely to receive greater focus given they are instrumental to address the intermittency of solar and wind. To this regard, we note recent policy initiatives (i.e., REPowerEU in Europe and Energy Security Strategy in UK) could potentially fast-track those technologies. Technologies we are watching: disruptive innovations will be needed on path to Decarbonization goals. As stated above, the path to Net Zero will require breakthroughs across multiple green technologies, as decarbonizing harder-to-abate