Sustainable, Responsible &/or ESG Policy:

The Goldman Sachs Global Clean Energy Infrastructure Equity Portfolio (the “Portfolio”) seeks total returns consisting of income and capital appreciation and seeks to promote environmental characteristics by investing primarily in equity securities of companies domiciled anywhere in the world that contribute to the decarbonization of the economy by generating, producing, transmitting, and/or distributing renewable energy.

We have a multi-prong process to ensure that a company is classified as renewable energy. The first prong is that it is classified by the Nomenclature of Economic Activities (“NACE”) as Electricity, Gas, Steam and Air Conditioning Supply. The second prong is that the company is part of one of three indices, the S&P Global Clean Energy Index, the Eagle Global Renewables Infrastructure Index, the Eagle North American Renewables Infrastructure Index. The third prong is that the company must have at least 50% of their assets, income, earnings, sales or profits committed to, or derived from, renewable energy electricity generation (wind, solar, hydrogen, geothermal, biomass, etc.), renewable storage, electric transmission and distribution, renewable energy equipment development and manufacturing, electrified transport, biofuel production, carbon capture or energy efficiency solutions (including smart grid). In order to classify as a renewable energy company under our definition, it must fit into one of these three prongs.[1]  

It is important to note that the Portfolio is not managed in view of achieving the long-term global warming objectives of the Paris Agreement. Some of the renewable energy companies in which the Fund invests, including companies that the Investment Adviser believes are involved in facilitating the generation, production, transmission and/or distribution of renewable energy, may still have other operations that involve traditional energy facilities (including oil, gas or other hydrocarbons). Such companies may have publicly disclosed net zero carbon goals, and the Investment Adviser seeks to engage with these companies to encourage a transition that avoids the locking in of carbon-producing assets.[2]

Once we start assessing a renewable energy company business as a candidate for our portfolio, the consideration of material ESG factors is embedded throughout our investment process. Driven by our philosophy of investing in high quality businesses over the long-term, we integrate material ESG factors throughout our investment process, where relevant. Our ESG assessment is analyst-led and is part of our 1) stock-level due diligence, 2) risk management and portfolio construction as well as 3) active ownership and stewardship efforts.

As it relates to our bottom-up company research, all research analysts can leverage our online investment platform, ‘Fluent’. Fluent allows our investment professionals to assess ESG factors across a large coverage universe by serving as a centralized investment research platform, which houses, among others, our ESG Dashboard. The ESG Dashboard pulls in material third party data tailored to a company’s business model and provides our investors with a first view of a company’s ESG profile. Additionally, analysts and all our investment teams across asset classes can access ESG news and research, engagement as well as proxy voting records via Fluent to further enhance their views and allow for effective and coordinated corporate engagement. 

Beyond leveraging our ESG Dashboard, analysts have the option to dig deeper on ESG by means of our proprietary Goldman Sachs Asset Management ESG Scorecard. The Scorecard serves the purpose of going beyond third-party data as it relates to assessing the ESG profile of a company. We have found this step to be valuable, as ESG data availability and accuracy can be challenging for certain companies. Thus, even though our analysts are not obligated to complete this more comprehensive assessment of ~65 ESG KPIs for our holdings in the portfolio, we have made the experience that the tool gets broadly leveraged and our research analysts have completed their own proprietary ESG assessment for ~95-100% of the portfolio’s securities (as of March 31, 2024). 

For companies with a completed Scorecard, the assessment forms the basis for stock-level due diligence and engagement. The Scorecard provides a standardized framework for conducting a baseline assessment of a company’s ESG characteristics relative to peers. Like our ESG Dashboard, the Scorecard pulls in material (defined by the SASB framework), time series data, allowing us to focus only on ESG factors that are meaningful to a firm’s growth, profitability and risk management profile. However, this is merely the starting point for a more holistic assessment whereby our analysts are encouraged to fill in data gaps, challenge third party inputs and use their intimate company knowledge derived from direct engagements to enhance their fundamental analysis.

Once the scorecard is completed it is used to compare the company against peers, industry averages and best practices. This insight can help inform, challenge or validate the assumptions that the analyst has used in their quantitative valuation models. Additionally, the covering analyst will provide a qualitative summary of a company’s overall ESG profile and translate their assessment of the underlying ~65 ESG KPIs into a qualitative score.

Tied into the idea of enhancing our process by integrating material ESG factors into investment decisions, we conduct ongoing monitoring of ESG factors on a case-by-case basis at the stock and portfolio level. Our investment teams can pull in a company’s ESG rating into our traditional valuation tools and Goldman Sachs Asset Management’s proprietary portfolio construction and risk tools allow our PM to analyse the ESG credentials of the portfolio and simulate the impact of potential trades. We measure ESG metrics, such as carbon intensity, on an ongoing basis and ESG metrics, such as this, are included in our daily risk reports. [3]

Once we own, our investors and the Goldman Sachs Asset Management Global Stewardship Team work together to use multiple levels of influence – proxy voting, corporate engagement, and active buying and selling – to encourage positive corporate change.

[1] The information contained on this page does not reflect binding characteristics of the portfolio for the purposes of the EU Sustainable Finance Disclosure Regulation (“SFDR”)

[2] The track record information and operational commitments on this page also relate to Goldman Sachs’s sustainability practices and track record at an organizational and investment team level, which may not be reflected in the portfolio of the product(s).

[3] The track record information and operational commitments on this page also relate to Goldman Sachs’s sustainability practices and track record at an organizational and investment team level, which may not be reflected in the portfolio of the product(s).

Further information in relation to the sustainability-related aspects of the Fund can be found at https://www.gsam.com/content/gsam/lux/en/advisors/products/fund-finder/goldman-sachs-global-clean-energy-infrastructure-equity-portfolio.html#scType=Class+I+Shares+%28GBP%29].

There is no guarantee that objectives will be met.

Process:

The portfolio management team has a multi-prong process to ensure that a company is classified as renewable energy. Having established a universe of renewable energy companies eligible for potential inclusion in the portfolio, the team undertakes detailed top down and bottom-up company research in order to identify renewable companies with potential for above-average growth over multiple years and also helps isolate potential trouble spots. Specifically, the team’s investment process is as follows:

Evaluates Overall Energy Trends

The Portfolio Management team seeks to understand how energy demand is shifting as a function of economic growth, technological advancements, government policies/incentives and consumer preferences. Through this process, the team aims to understand how these demand changes impact the need for clean energy infrastructure.

Establishes Implications of Overall Energy Trends for Clean Energy Infrastructure Companies

The team focuses on the following factors in seeking to understand how overall energy trends have the potential to drive performance of clean energy infrastructure companies:

• Technology Exposure Selection: Focus on lowest-cost proven technologies (including solar, wind, hydro and biomass).
• Functional Exposure Selection: Focus on functional areas that the Portfolio Management Team believes offer the most attractive return profiles, supported by long-term contracts, with limited commodity price risk exposure across energy infrastructure (such as power generation, storage, transmission or energy efficiency solutions).
• Regional Exposure Selection: Focus on companies that own assets in regions with access to high quality renewable resources, as well as regions where governments may support certain types of clean energy infrastructure development, while also seeking geographic diversification

Identifies Specific Companies for Investment

Having established an understanding of how supply and demand patterns could shift over time and their implications for clean energy infrastructure, the team undertakes detailed bottom-up analysis of individual companies with exposure to the trends identified. This process helps identify companies with potential for above-average growth over multiple years and also helps isolate potential trouble spots. Specifically, the team:

• Creates and maintains proprietary financial models on companies within the investment universe
• Engage with management teams
• Evaluate the renewable energy mix, regulatory/contractual framework and customer quality
• Employs multiple valuation methodologies including discounted cash flow analysis, yield-based valuation, total address market, and other cash flow-based metrics to estimate fair value of target companies
• Monitors the health of target companies’ balance sheets, availability of liquidity, access to debt and equity markets, and other similar factors
• May integrate ESG factors with traditional fundamental factors. ESG factors that the Investment Adviser may consider include, but are not limited to, include environmental and social reporting, disclosure and transparency, carbon intensity and emissions profiles, workplace health and safety, community impact, human rights considerations, governance practices and stakeholder relations, employee relations, board structure, transparency and management incentives. The identification of a risk related to an ESG factor will not necessarily exclude a particular security and/or sector that, in the Investment Adviser’s view, is otherwise suitable for investment. The relevance of specific traditional fundamental factors and ESG factors to the fundamental investment process varies across asset classes, sectors and strategies. The Investment Adviser may utilize data sources provided by third party vendors and/or engage directly with companies when assessing the above factors. The Investment Adviser employs a dynamic fundamental investment process that considers a wide range of factors, and no one factor or consideration is determinative.
• In addition, all investments of the Portfolio are assessed to follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance.
• As part of its focus on long-term, active ownership, the Investment Adviser may, in certain circumstances, use proxy voting and engagement as some of the tools available to encourage positive corporate decision making and productive change, where possible.

For further details on our ESG process for the fund, please refer to the question immediately above.

Internal and External sources of data:[1]

We use proprietary ESG research as well as leverage external research providers. The vast majority of our ESG research is internally generated and investor-led.  As a result, all of our investors conduct ESG research and engagement, which is naturally embedded into our fundamental research process, informs our models and is part of decisions we make at the company level.

In terms of external resources, we use ESG data from several data providers for various purposes. While ESG data availability and quality continues to improve, we do not believe there is currently one ESG data provider that holistically packages the most useful underlying data. We therefore believe in leveraging multiple providers, including MSCI, Bloomberg, ISS and Corporate Knights, to meet our diverse set of needs and use cases. We purchase data from both broad-based sources providing data across environmental, social, and governance characteristics, as well as more narrow data sets, such as those focused specifically on environmental data. We primarily use the raw, granular underlying data, such as carbon emissions, while also selectively leveraging qualitative ESG reports written by external analysts.

This data primarily serves as a starting point of any ESG assessment we conduct for our portfolio holdings. For instance, the first iteration of our proprietary ESG scorecard*, pulls in historical inputs from external providers. In a second step, our research analysts are required to review the initial inputs and validate or override data fields which conflict their views. Most importantly, our analysts are encouraged to complement backward-looking data with their forecasts around how the business might evolve going forward.

Generally speaking, we would caution to rely exclusively on 1) external providers and 2) quantitative data in this context. We believe that as fundamental manager we know the companies in our universe much better than external sources and have superior access points to management teams and various stakeholders. Further, while third party providers are primarily focused on collecting historical data, we are asking ourselves how a business might evolve over the next 3, 5 and 10 years from now and acknowledge the fact that some areas of ESG research cannot be captured by numbers alone. Having this said, we leverage external ESG data to enhance our bottom-up fundamental research processes, implement client directed exclusions and inform internal analysis of the ESG characteristics of client portfolios.

We continually review our external providers to remain abreast with the latest technology and services that complement our process and investment philosophy.

*ESG scorecards are only one among many available tools that Fundamental Equity’s analysts may leverage to conduct a proprietary ESG assessment where relevant. For illustrative purposes only. There is no guarantee that these objectives will be met. For ESG Integrated portfolios, such as the GS Global Clean Energy Infrastructure Equity Portfolio, ESG scorecards might not be completed for all holdings of the portfolio. As of 31-Mar-2024, research analysts have completed ESG scorecards for ~95-100% of the GS Global Clean Energy Infrastructure Equity Portfolio. GSAM may invest in a security prior to completion of the ESG scorecard. Instances in which ESG scorecards may not be completed for a specific security prior to investment include but are not limited to IPOs, in-kind transfers, corporate actions, and/or certain short-term holdings. GSAM in its sole discretion and without notice may periodically update or change the process for conducting its ESG assessment and implementation of its ESG views in portfolios, including the format and content of such analysis and the tools and/or data used to perform such analysis. Accordingly, the type of assessment depicted here may not be performed for every portfolio holding. No one factor or consideration is determinative in the fundamental research and asset selection process. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

[1] For illustrative purposes only. ESG information, whether from an external and/or internal source, is, by nature and in many instances, based on a qualitative and subjective assessment. An element of subjectivity and discretion is therefore inherent to the interpretation and use of ESG data. The relevance and weightings of specific ESG factors to or within the investment process vary across asset classes, sectors and strategies and no one factor or consideration is determinative. Goldman Sachs Asset Management in its sole discretion and without notice may periodically update or change the process for conducting its ESG assessments and implementation of its ESG views in portfolios, including the format and content of such analysis and the tools and/or data used to perform such analysis.

Resources, Affiliations & Corporate Strategies:

Governance

At Goldman Sachs Asset Management, the Asset and Wealth Management (AWM) Sustainable Investing (SI) Executive Group leverages the expertise of senior business leaders responsible for global business and investment functions and oversees the overall AWM sustainability strategy and seeks to ensure consistency between public markets, private markets and our wealth management business[1].

With respect to our public markets investment businesses, the Sustainable Investing Oversight Group is responsible for providing oversight of SI methodologies and frameworks, various SI commitments and AWM Public SI policies. In addition, the Public Market Sustainable Investing Leadership Council brings together sustainable investing experts and practitioners to guide implementation of sustainable investing within the investment teams as relevant. The Proxy Voting Council oversees the Public Markets Investing Global Proxy Voting Policy, including sustainable investing-related sections. The Asset Management Public Risk Working Group assesses and proposes mitigation measures for risks related to business activities in Public Markets Investing.

For further details on our management oversight bodies, see our Goldman Sachs Asset and Wealth Management 2022 TCFD report.

Research

Within Goldman Sachs Asset Management, most investment personnel conducting sustainable investment research, focusing on ESG factors in portfolio construction, and driving our stewardship and engagement efforts sit within each of our investment teams. We devote considerable resources to sustainable and impact investing and have over 200 professionals who spend the majority of their time on sustainability related research, portfolio management, stewardship, engineering, and risk management[2].

The Sustainability and Impact Solutions is a dedicated team within Asset and Wealth Management that mobilizes the full range of insights, advisory services, and investment solutions across our client segments.

In Public Markets Investing business, sustainable investment professionals are supported by the Sustainable Investing & Innovation Platform (“SIIP”). Some of the areas of focus of SIIP include enhancing and developing sustainable investing data, tools and analytics, enhancing ESG integration within investment strategies and reporting. Additionally, Public Markets Investing has appointed ESG Leads who are embedded within our asset classes – Equities, Fixed Income, Multi-Asset Solutions, and the External Investing Group.

In Private Markets Investing, the Sustainability & Impact team leads the sustainability strategy for the business. The ESG business leads embedded in the Private Equity, Infrastructure, Private Credit, Real Estate, and Sustainable Investment Group (SIG) businesses are responsible for integrating and implementing, where applicable, sustainability best practices and climate strategy into the investment process for their business unit.

In addition to our efforts within Goldman Sachs Asset Management, within the Executive Office, our Sustainable Finance Group (SFG) serves as the centralized group that drives climate strategy and sustainability efforts across Goldman Sachs. This includes commercial efforts alongside the firm’s businesses — all with the goal of advancing the success of our clients and promoting sustainable, inclusive growth and advancing the climate transition. SFG also engages with our stakeholders to stay abreast of and assist with environmental and social risk management and related guidelines.

Affiliations / Memberships

Goldman Sachs and Goldman Sachs Asset Management seek to build industry influence and promote best practices in ESG and stewardship through various memberships and affiliations. Below, find a select list of our affiliations/memberships:

Goldman Sachs:

• UN PRB – Goldman Sachs has been a signatory to the UN Principles for Responsible Banking (UNPRB) since 2021. UN Principles for Responsible Banking is a platform for partnering with the financial sector to deliver on the Paris Agreement goals. As a member, Goldman Sachs acknowledges the broad, collaborative industry effort required to address climate change. Using this platform to collaborate with our clients, peers, and broader stakeholders, we are committed to setting business-related climate goals.

• NZBA/ GFANZ – Goldman Sachs has been a signatory to the Net Zero Banking Alliance (and GFANZ) since 2021. As an alliance member, Goldman Sachs remains committed to partnering with our clients, industry peers, and policymakers to deliver in the transition to net zero.

• Taskforce on Climate-Related Financial Disclosures (TCFD) – Goldman Sachs has been a supporter of the TCFD since 2018 and published its first report in 2019.

• OS-Climate – In 2021, Goldman Sachs joined as the founding US bank of OS-Climate, a cross-industry coalition and open-source platform for climate data and analytical tools that will be critical for clients to achieve their net zero ambitions.

• CDP – Goldman Sachs has been a signatory to the CDP climate change survey since 2006 and has made our climate change-related disclosures publicly available since 2010. In 2021, to facilitate dialogue with our vendors around their own emissions management programs, we joined CDP Supply Chain as a lead member.

• The Climate Group (RE100, EV100, EP100) – As part of our commitment to advancing renewable energy markets, we were the first US corporate to sign onto all three of The Climate Group’s RE100, EV100 and EP100 programs. These initiatives are focused on, respectively: 100% procurement of electricity from renewables; electric transport; and energy productivity. Additionally, we set a firmwide target of sourcing 100% renewable electricity, which we achieved in 2020.

• WRI Corporate Consultative Group – Since 2014, we have been members of the advisory board for the World Resources Institute’s Corporate Consultative Group

• Climate Finance Leadership Initiative (CFLI) – Goldman Sachs joined the Climate Finance Leadership Initiative as one of the founding member institutions in 2019. CFLI convenes leading companies to mobilize and scale private capital for climate solutions.

Goldman Sachs Asset Management:

• PRI – Goldman Sachs Asset Management has been a signatory to the United Nations Principles of Responsible Investment (UNPRI) since 2011.

• Climate Bonds Initiative – Goldman Sachs Asset Management became a Climate Bonds Initiative Partner in 2015.

• One Planet Sovereign Wealth Fund Framework – Goldman Sachs Asset Management became a member of the Asset Manager Working group within the One Planet Sovereign Wealth Fund Framework in 2018.

• International Capital Market Association (ICMA) – Goldman Sachs Asset Management joined ICMA’s Green, Social & Sustainability Bond Committees in 2019.

• United Nations Development Programme (UNDP) – Goldman Sachs Asset Management joined the UNDP SDG Financing Technical Committee in 2019.

• European Fund and Asset Management Association (EFAMA) – In 2019, Goldman Sachs Asset Management joined the ESG Investment Steering Committee of EFAMA.

• Institutional Investors Group on Climate Change (IIGCC) – Goldman Sachs Asset Management has been a member of the IIGCC since 2019.

• Sustainability Accounting Standards Board (SASB) – Goldman Sachs Asset Management has been a member of SASB since 2018.

• Japan Stewardship Code – Goldman Sachs Asset Management has been a signatory since 2014.

• Singapore Stewardship Principles – Goldman Sachs Asset Management has been a supporter of the Singapore Stewardship Principles since 2016.

• Investor Stewardship Group (ISG) – Goldman Sachs Asset Management became a signatory of the ISG in 2018.

• 30% Club Japan – Goldman Sachs Asset Management became a member of the 30% Club’s Japan Investors Group in February 2020.

• Climate Action 100+ – Goldman Sachs Asset Management became a member of Climate Action 100+ in 2021.

• UK Stewardship Code – Signatory to the 2020 UK Stewardship Code, previously a signatory to the 2012 code.

• Asia Corporate Governance Association (ACGA) – Goldman Sachs Asset Management joined the ACGA in 2022 and is a member of the China Working Group.

• Council of Institutional Investors – We have been a member since 2017 and hold a seat on their Corporate Governance Advisory Council

• ESG Disclosure Study Group – We became a founding member of the EDSG in June 2020. EDSG is a Japan-based organization focused on carrying out research related to ESG information disclosure best practices to enhance corporate value and growth as well as the sustainable development of society.

• International Corporate Governance Network (ICGN) – We became a member of the ICGN in January 2020. Established in 1995 as an investor-led organization, the ICGN’s mission is to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies worldwide.

• Japan Stewardship Initiative – We are part of the steering committee.

• EDCI: Goldman Sachs Asset Management signed onto the Institutional Limited Partners Association (ILPA) ESG Data Convergence Project in 2021, which convenes leading GPs and LPs in an effort to standardize ESG data collection in the private equity sector.
  

• GRESB: The Goldman Sachs Asset Management Infrastructure team has worked with some of our portfolio companies to submit a report to GRESB in 2023.

Key Sustainability Individuals:

• John Goldstein, Global Head of Sustainability and Impact Solutions, Client Solutions Group
• Valentijn van Nieuwenhuijzen, Global Head of Sustainability for Public Investing and Co-Head of Multi-Asset Solutions
• Letitia Webster, Global Head of Sustainability for Private Investing

The Global Stewardship Team is led by Catherine Winner and has an additional 10 members located in New York, Tokyo, and London[3]. The team is further supported by the broader Goldman Sachs Asset Management platform, that includes coordination among legal, compliance, and operations.

[1] For illustrative purposes only. ESG information, whether from an external and/or internal source, is, by nature and in many instances, based on a qualitative and subjective assessment. An element of subjectivity and discretion is therefore inherent to the interpretation and use of ESG data. The relevance and weightings of specific ESG factors to or within the investment process vary across asset classes, sectors and strategies and no one factor or consideration is determinative. Goldman Sachs Asset Management in its sole discretion and without notice may periodically update or change the process for conducting its ESG assessments and implementation of its ESG views in portfolios, including the format and content of such analysis and the tools and/or data used to perform such analysis.

[2] As of 31 December 2023. This figure is at a point in time and is subject to change over time. Figures are related to Goldman Sachs’ professionals at the organizational level and include individuals deemed to spend approximately 80% or more of their time on sustainability related research, portfolio management, stewardship, engineering, and/or risk management. The majority of professionals are not dedicated to nor support any specific investment team or product.

[3]As of December 2023, and subject to change at any time.

Dialshifter

This fund is helping to ‘shift the dial from brown to green’ by…

The Goldman Sachs Global Clean Energy Infrastructure Equity Portfolio (the “Portfolio”) seeks total returns consisting of income and capital appreciation and seeks to promote environmental characteristics by investing primarily in equity securities of companies domiciled anywhere in the world that contribute to the decarbonisation of the economy by generating, producing, transmitting, and/or distributing renewable energy. The companies that the portfolio focuses investments in are helping to provide consumers with long-term affordable, clean and secure energy.

Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by...

Goldman Sachs remains committed to support the goals of the Paris Agreement, which includes aligning our business with a net zero by 2050 pathway. In 2009, we established a commitment to achieve carbon neutrality in our operations by 2020, which we achieved in 2015 and maintained annual since. Beyond this, Goldman Sachs also continues to manage its operations according to our Environmental Policy Framework, working toward a set of ambitious 2025 operational targets. These targets range from reducing energy intensity by 20% (2017 baseline) for offices under operational control, to reducing internal paper use per capita by 30% (2017 baseline), to achieving a 20% reduction in water use for all new construction and major renovation projects[1]. Please refer to our Goldman Sachs Sustainability Report for additional information.

In 2019, Goldman Sachs announced the 10-year, $750 billion sustainable finance commitment to support the increasing demand for sustainable finance solutions across our financing, investing, and advisory work with clients. We took this step because we saw that climate transition and inclusive growth were increasingly central issues for markets and economies. Since setting this 10-year goal, we’ve achieved approximately $425 billion[1] in commercial activity, including $215 billion in climate transition, $67 billion in inclusive growth and the remainder in multiple themes.[2]

In Goldman Sachs 2021 TCFD report, we shared an initial set of targets for 2030 for three sectors: Energy, Power and Auto Manufacturing. These sectors reflected where we saw the greatest opportunity to proactively engage with our clients, deploy capital required for the transition, and invest in new commercial solutions to support transition to the low-carbon economy. The Goldman Sachs 2023 TCFD Report provides an update on our 2030 sectoral targets. The table below shows the intensities of our 2021 financing portfolios. We are reporting 2021 data as that is the most current year of data that exists for company-reported intensities, vendor production data, and vendor estimates of company emissions. In 2024, we plan to provide another update on progress toward our 2030 sectoral targets as well as assess and set targets for additional carbon-intensive sectors. We also plan to provide other disclosures as related regulatory guidance is finalized.

SDR Labelling: Not eligible to use label