Goldman Sachs will still work with fossil fuel companies.
The Wall Street bank fears there will be “inflationary” consequences if private capital is diverted away from fossil fuels too aggressively.
CEO David Solomon told Bloomberg that the bank will not stop its business with fossil fuel companies abruptly.
Solomon stressed the need for a balanced shift to green energy that avoids even higher energy costs.
He said, “We have to balance good public policy with the short-term implications and that’s why it is a transition. If we’re too aggressive in the context of how we direct capital to the private sector that can be more inflationary.”
The bank wants to work with firms investing in the transition towards net-zero carbon emissions, but it will continue to do business with fossil fuel companies during that process.
His comments follow a global gas price crisis where soaring wholesale costs have resulted in 13 UK energy firms ceasing trading since the start of September.
Goldman Sachs is set to be the last international bank to sign up to Mark Carney’s targets ahead of the COP26 climate summit.
The Times reports that the former governor of the Bank of England wants finance companies to align lending and investment portfolios with net-zero emissions by 2050.