CLIMATE TRANSITION Spotlight on Carbon Markets: Our Commercial Framework carbon markets, we offer a variety of trading, financing, and Approach and risk management solutions to help corporates and As an important tool to reduce carbon emissions, carbon investors manage their carbon exposure and meet their markets can drive reductions at the most efficient price. By sustainability goals. offering solutions within carbon markets as part of our cross- firm Decarbonization offering, Goldman Sachs can help to Setting the Scene: Carbon Pricing Initiatives on the Rise better position industries and clients for continued progress Carbon pricing initiatives, of which there are more than in their climate transition journey. 60 globally, are an important tool to achieve the emission reduction ambitions under the Paris Agreement. We believe For more than 10 years, Goldman Sachs has been active in that a global carbon price can serve as a critical path major compliance carbon markets, such as the European to advancing global net zero ambitions by incentivizing Union Emissions Trading System (EU ETS) and the California technological innovation and progress in decarbonization Cap and Trade Program. We are also active in the growing technologies. global voluntary carbon offset market — and within several industry and advisory bodies. For example, we are members While carbon pricing and taxes can be an effective policy of the “Taskforce on Scaling Voluntary Carbon Markets,” a instrument, market-based mechanisms allow the supply and private sector-led initiative working to scale an effective and demand for carbon allowances — or credits — to determine efficient voluntary carbon market to help meet the the price of carbon. These voluntary markets can effectively Paris Agreement goals. Within the compliance and voluntary aim to drive finance to activities that reduce emissions. Sustainability Report 2021 Climate Transition | Driving Transition 24