goldman sachs asset management: our approach to esg investing
TRANSCRIPT
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
August 2020
Goldman Sachs Asset Management: Our
Approach to ESG Investing
3 Executive Summary
Integration Across the
Division
180+ investment professionals integrating ESG, including 40+ ESG and impact
investing experts
ESG capabilities within GSAM span public equities, fixed income, liquidity, private
markets
Widespread collaboration among GSAM teams allows for increased leverage and deeper engagement
Investment-Driven
Philosophy
Stewardship is a Key
Focus
Stewardship, engagement, proxy voting, network memberships are core to our
approach
350+ top-down engagements of Global Stewardship Team complement the ~ 2,000
bottom-up engagements of GSAM investment teams
Breadth, Depth, and
Scale Across the Firm
Goldman Sachs has a firmwide commitment to sustainable finance across all of our
business lines, demonstrated by the formation of the Sustainable Finance Group
Ability to leverage firmwide resources allows delivery of comprehensive sustainability
solutions
GSAM’s Approach to ESG and Impact Investing
ESG implemented with a range of approaches: integration, alignment, thematic, impact
Customization to client requirements and objectives
Growing suite of commingled solutions
Source: GSAM, as of 30-Jun-2020. There is no guarantee that these objectiv es will be met. GSAM lev erages the resources of Goldman Sachs & Co. LLC subject to legal, internal and regulatory
restrictions.
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Source: GSAM, as of June 30, 2020. For illustrative purposes only. There is no guarantee that these objectives will be met. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
“For companies to achieve high and sustainable returns over the long term, we believe they must embrace and adopt robust environmental, social and governance (ESG) standards. Failure to do so is their biggest risk.” – Katie Koch; Co-Head of Fundamental Equity
Sound ESG Practices...
...Drive Value Creation
... And Long-Term Performance
Environmental
Energy Management
Emissions
Resource Intensity
Social
Labor Practices
Supply-Chain Management
Community Impact
Governance
Shareholder Rights
Transparency
Management Alignment
Strong Growth
Brand / Trust
Addressable Opportunity / Need
Competitive Position
Higher Profitability
Minimized Waste
Production / Execution Eff iciency
Employee Productivity
Lower Cost of Capital
Higher valuation multiples
Low er discount rates
Greater sustainability of returns
Enhanced understanding of company fundamentals
Increased conviction in
investment decisions
Clear framework for further
engagement
Why ESG Matters ESG analysis can help mitigate risks and uncover investment opportunities
FOR INSTITUTIONAL OR FINANCIAL INTERMEDIARIES USE ONLY – NOT FOR USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC
5 FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
Why ESG Matters Doing well and doing “good” are not mutually exclusive
Majority of Assets Can’t Be Analyzed Without Using ESG1 “Good” Companies Enjoy Lower Funding Costs2
Happy Employees = Better Returns3 ESG Controversies Can Cost A Lot4
Average peak-to-trough performance of ESG controversy stocks relative to the S&P500 Cumulative relative performance (indexed to 100) w hen buying the top quintile
stocks and selling the bottom quintile stocks
Source : Bank of America Merrill Lynch, 10 Reas ons Y ou S hould Care About ESG . 1FactSet, BofA Merrill Lynch US Equity & Quant S tra tegy. 2MS CI ESG Res earc h LLC, BofA Merrill Lynch US Equity & Quant St rategy. 3B ofA Merrill Lynch US
Equity & Quant St rategy, Thinknum. Note : Data fo r Jan 2013 – Dec 2018, quarterly rebalancing.Top quintile includes stocks in the top 20th percentile based on Glassdoor ratings; bot tom quin tile includes stocks in the bottom 20 th percentile
based on Glassdoor ratings. B ack tested perfo rmance is hypothetical in nature and reflects application of the screen and is not in tended to be indicative of future performance . 4BofA Merrill Lynch US Equity & Quant St rategy. Note: Market
cap weighted, 30 days prior to through 360 days post controversy. Includes 24 controversies related to data breaches, accounting scandals, sex ual harassment and other ESG topics.
Weighted average option-adjusted spread vs. MSCI ESG scores as of 8/2019 S&P500 intangible assets as a percent of book value, 1998-2018
6
• Limited quality & availability
• Backward looking
• Inconsistent third party scoring
1. Flawed Data
2. Resource Intensive
• Infrastructure heavy
• Human diligence dependent
• Expertise required
3. Varying Views
• Lack of standardization
• Differing views on materiality
• Diverse client values & objectives
Source: GSAM, as of June 30, 2020. For illustrative purposes only. There is no guarantee that these objectives will be met. 1 GS SUSTAIN, February 2018. Data corresponds to MSCI ACWI constituents. 2 Schroders, March 2018.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Environmental Social Governance
MSCI vs. Sustainalytics MSCI vs. Thomson ReutersSustainalytics vs. Thomson Reuters
Challenges of the space…
71% of numeric ESG metrics have less than 20% disclosure1
THEREFORE
Common approaches to ESG scoring tend to rely on vague policies,
favoring quantity of ESG disclosure over quality of ESG practices
AND
Scores across the main ESG scoring providers vary considerably2
Sc
ore
Co
rre
lati
on
The Challenges Of Determining ESG Practice ESG investing is inherently complex, lending itself to a fundamentally driven, active
approach
FOR INSTITUTIONAL OR FINANCIAL INTERMEDIARIES USE ONLY – NOT FOR USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC
8
GSAM FI ESG Integration: A materiality-driven process Focus on ESG themes & issues that matter (Equities & FI illustration)
Chart Source: Mo Khan, George Seraf eim and Aaron Yoon. 2015. Corporate Sustainability : First Ev idence on Materiality . The Ac counting Rev iew
• Governance was most closely associated with the performance in the first study (2016)
• Issuers with high Governance scores experienced lower incidence of downgrades by credit rating agencies
• Environment had the strongest effect in the subsequent 2018 study, in particular in the US where over the two years it was the factor mostly closely related to outperformance
Barclays (2016, 2018) is the most quoted source for sustainable investing and bond (IG) returns
Tilting a credit portfolio in favor of high ESG-rated bonds tends to lead to higher returns
9
GSAM ESG Integration: Material themes & issues
E, S or G Theme Issue Risk Exposure Risk mitigation example
Greenhouse gas emissions Carbon tax L/T carbon emissions reduction target
Carbon emissions attributed to upstream supply chain Life cycle management of emissions
Financing environmental impact (fossil fuel risk in Banks' loans portfolio) e.g. climate risk reporting (TCFD)
Energy Management Cost & energy efficiency regulation Energy intensity reduction target
Air quality (pollution) NOx, SOx, VOC standards Year-on-year performance improvement
Waste Plastic regulation Packaging lifecycle approach
Water & Wastewater Water stress regions Water & wastewater management
Ecological Impact & Land Use Deforestation-related commodities Sustainable sourcing (e.g. palm oil)
Raw material sourcing Materials of concern (e.g. deforestation, resource-intensive) Collaborate with suppliers to address impact
Business Model &
Innovation
Green Product/Business
Opportunities
Opportunities in Renewable Energy
Opportunities in Clean Tech
Opportunities in Green Buildings
% of assets in renewables/power generation
Commercializing clean tech products
High % of properties with certification
Human Capital Management Talent & skills shortage Attractive compensation, labor dialogue
Health & Safety Record on incidents & fatalities Accident & safety Management
Human Rights & Labor Rights Child labor, community resistance to projects Audits, community engagement
Product: Safety & Quality Product recalls, litigation Supply chain management
Product: Wellness & Nutrition Sugar tax Food reformulation (nutrients)
Product: Positive Impact Social benefits from products (not credit risk) Opportunities for growth (equities)
Cybersecurity & Data Cyber attacks Controls & remediation plans
Corporate Governance Conflicts of interest Board expertise and independence
Equity owners vs creditor interests Bondholder covenants
Track record & strategic priorities Accounting & disclosure quality
Corruption litigation Anti-bribery & corruption training
Conduct breaches
Customer Complaints
Whistleblower Reports & Complaints
reviewed by the Board
Business Ethics
Governance
Climate ChangeProduct Carbon Footprint
Board and Management
Quality
Conduct & Culture and
Business Ethics
EnvironmentResource Efficiency &
Natural Capital
Social
Product Safety &
Quality, Wellness &
Impact
Human Capital
Factors that are material to a firm’s growth, profitability and risks
Source: GSAM. As of August 2020. For illustrativ e purposes only .
Bondholder focus is primarily on downside risk that impact an issuer’s ability to repay its debts. Equities also looks at tai l risk but additionally upside (sustainability
solutions)
10
GSAM Proprietary ESG rating
c
a. Peer Comparison b. Momentum
5.0 Leader Improving
4.0
3.0
Stable
2.0
1.0 Deteriorating
0.0 Laggard
GSAM ESG Integration: Research Each issuer/stock assessed on ESG, including forward-looking momentum
• Assess risk
• Ev aluate Trend
• E-Climate
• G-Buy backs
• S - Inclusiv e growth
• TCFD
• SASB
• EU Taxonomy
• MSCI
• Bloomberg
• CDP
Third-Party ESG Data
ESG Standards
Direct Engagement
ESG Theme Analytics
ESG Tools / Data & Metrics: acronyms
CDP – formerly known as the Carbon Disclosure Project
TCFD – Task Force for Climate-Related Disclosure
SASB – Sustainability Accounting Standards Board
EU Taxonomy – definitions to help investors understand what is ‘green’
ESG team provides framework, tools, thematic insights
Engagement is an input to ESG ratings (momentum)
Analysts and economists own and assign the ESG rating
Captured on existing research platform/PM systems
ESG Tools / Data & Metrics ESG Rating Framework
Source: GSAM. As of August 2020. For illustrativ e purposes only .
11
Greenhouse Gas
Emissions
Green Product
Air Quality (Pollution)
Water & Wastewater
Human Capital
Management.
Board and Management
Quality
En
viro
nm
en
tal
( 70
% )
So
cia
l ( 1
0%
)
Go
ve
rna
nc
e
( 20
% )
Utility
Iss
ue
r ES
G S
co
re
(0-5
+ tre
nd
)
Implementation e.g. Utilities
GSAM Integration: ESG view captured on Research/PM systems
Corporate ESG criteria
Source: GSAM. As of August 2020. For illustrativ e purposes only .
12
ESG View – European REIT (residential)
• Overview: Real estate company’s ESG rating by 3rd party data provider
remains constrained because of its governance structure and apparent lack of evidence of green investment programs. However, GSAM FI’s coverage analyst has in-depth knowledge of the business from regular engagement and has positive ESG view based on these factors:
• E: The company’s acquisition of residential properties focuses on those in cities with strong growth and the potential of upgrading older buildings. >50% of its portfolio has been fully modernized, with ongoing upgrade investments (guided by energy performance) on 5-7% of its properties every year. Targets to 2025 of reducing carbon intensity by 50%.
• G: ESG rating providers typically have a shareholder perspective, whereas our bondholder view of this company is that management are not incentivized to take un-necessary risks, with profits used for charitable purposes or reinvested in the business.
Illustration of GSAM ESG ratings (positive examples)
Source: GSAM. As of August 2020. For illustrativ e purposes only .
Proprietary rating with 3rd party data inputs but FE/FI analysts’ analysis and view
REITs Case Study: quantitative & qualitative ESG assessment
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Investment Research: Centralized Research Platform Fluent allows us to track ESG views, company engagements and proxy voting outcomes
News & Research
ESG Assessment
Framework
Engagements
Proxy voting
records and
results
Overall view
and ratings
Source: GSAM, as of June 30, 2020. For informational purposes only and should not be construed as research, investment advice or a recommendation. There is no guara ntee that these objectives will be met.
FOR INSTITUTIONAL OR FINANCIAL INTERMEDIARIES USE ONLY – NOT FOR USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC
15
Portfolio Construction & Risk Management Proprietary portfolio construction and risk tools allow PMs to analyze the ESG
credentials of their portfolios and simulate the impact of potential trades
Trade Simulation Using Portfolio Constructor Daily Risk Assessment Reports
Contributors to
portfolio’s
carbon intensity
Proposed portfolio
would reduce the
carbon intensity below
the benchmark
Source: GSAM, as of June 30, 2020. For informational purposes only and should not be construed as research, investment advice or a recommendation. There is no guara ntee that these objectives will be met. The portfolio risk management
process includes an effort to monitor and manage risk, but does not imply low risk.
FOR INSTITUTIONAL OR FINANCIAL INTERMEDIARIES USE ONLY – NOT FOR USE AND/OR DISTRIBUTION TO THE GENERAL PUBLIC
17
GSAM Stewardship: Engagement & Proxy Voting
0
10
20
30
40
0
20
40
60
80
100
2011 2012 2013 2014 2015 2016 2017 2018 2019
Other
Asia Pacific
North America
Europe
% Vote in Favour
Number Vote in Fav our (%)
Helping to drive climate disclosure
Source: Prox yInsight, Data compiled by Goldman Sachs Global Investment Research
Engagement with corporates helps us to:
Enhance understanding of company fundamentals
Increase conviction in investment decisions
Inform ‘momentum view’ in our Proprietary ESG rating
Drive disclosure, using our voice as a large, active manager
0%
25%
50%
75%
100%
125%
Jan-2020 Feb-2020 Mar-2020 Apr-2020
Employee Health and Safety Labor Practices
Access and Affordability Product Quality and Safety
Supply Chain Management Other Categories
We’re raising the bar on our expectations of companies
Global Proxy Voting on climate disclosure resolutions Global ESG Topic Share in COVID-19 Related Content
Source: Truvalue Labs, May 2020. Based on >10,000 unique information sources
GSAM Proxy-Voting Highlights:
Supported shareholder proposals on:
climate change disclosures 60% of the time
gender pay gap disclosures 93% of the time
Voted against 312 directors at 214 companies for lacking at least one woman
Contributing to Inclusive Growth
Source: GSAM. As of August 2020. For illustrativ e purposes only .
18
Source: GSAM, as of March 31, 2020. For informational purposes only and should not be construed as research, investment advice or a recommendation. There is no guarantee that these objectives will be met.
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
GSAM’s Engagement Approach We have a robust, global engagement effort that marries the vision of our dedicated
Global Stewardship Team with the expertise of our investment teams
10,000+
Engagements
Annually
“Top-Down”
“Bottom-Up”
The Global Stewardship Team conducts top-down engagements on strategic ESG priorities
Targeted engagements to promote positive change on our strategic policy objectives
Regularly engage ~350 companies over 400+ meetings annually
The Fundamental Equity and Global Fixed Income investment teams conduct bottom-up
engagements as part of ongoing company due-diligence
Investment teams engage companies regularly to inform investment decisions
Regularly engage ~2,000 companies over 10,000+ meetings annually
PRI Engagement Rating: A+
20
ESG Amplified
Spotlight on S data
Companies’ positive declarations about how they
value their employees,
suppliers and communities
are being put to the test. There is a lack of available
and comparable data on
social factors.
Social
The long-running debate
about the purpose of the corporation has been
invigorated by Covid-19
Green Recovery
An opportunity for
governments as advocated by the IMF and other
policymakers, particularly
Europe
Climate change
Overall, w e expect most companies w ill
recognise that 'green'
investments are secular—
not cyclical—decisions.
Governance
Covid-19 provides new
datasets on the resilience of business models w hen
faced with a stay-at-home
economy and an upside-
dow n energy market.
Is Covid-19 a watershed for ESG investing? Spotlight on interdependencies in human and natural ecosystems
Source: GSAM. As of August 2020. For illustrativ e purposes only .
23
Source: GSAM, as of March 31, 2020. Data for July 1, 2018 through June 30, 2019. For illustrative purposes only. There is no guarantee that these objectives will be met. Please see the 2019 GSAM Stewardship Report on our website for
additional information and case studies.
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
GSAM Global Stewardship Team Engagement 2019 Snapshot
Focus Areas Objectives
ESG
Reporting
• Increase SASB reporting
• Increase disclosure on material ESG risks
Board
Composition
• Increase number of women on corporate boards
• Address and resolv e board structure concerns
Corporate
Strategy • Address and resolv e capital allocation concerns
Environmental
Risks • Reduce GHG emissions
Social Risks • Increase percentage of gender and racial/ethnic
representation in the workplace
Proxy & Shareholder
Relations
• Gather inf ormation to make inf ormed proxy v oting
decisions
• Prov ide f eedback on a Company ’s request f or
inf ormation
Engagements by Sector
Engagements by Theme
27%
23% 17%
12%
12%
9% Proxy & Shareholder Relations
ESG Reporting
Board Composition
Social Risks
Environmental Risks
Corporate Strategy
Sector # of Meetings
Communication Serv ices 13
Consumer Discretionary 42
Consumer Staples 29
Energy 23
Financials 51
Health Care 45
Industrials 68
Inf ormation Technology 63
Materials 29
Real Estate 31
Utilities 23
Total 417
Engagement Focus Areas
24
Source: GSAM, as of March 31, 2020. Data for July 1, 2018 through June 30, 2019. For illustrative purposes only. There is no guarantee that these objectives will be met. Please see the 2019 GSAM Stewardship Report on our website for
additional information and case studies.
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
GSAM Global Stewardship Team Engagement 2020 Priorities
Focus Areas Objectives
ESG Frameworks
• Promote disclosure on material ESG risks through the SASB and TCFD framew orks
Board Composition
• Increase the number of w omen on corporate boards globally
• Address and resolve board structure concerns
Corporate Strategy
• Address and resolve capital allocation concerns
Climate Related Topics
• Reduce GHG emissions
• Promote disclosure of climate metrics, such as emissions data, targets and goals
• Address physical and transitional climate risks
Social Risks
• Increase disclosure of w orkplace demographics
• Gather information on a Company’s commitment to all stakeholders; including customers, employees,
suppliers, communities, and shareholders.
Proxy & Shareholder Relations • Gather information to make informed proxy voting decisions
• Provide feedback on a Company’s request for information
Engagement Focus Areas
25
Using Engagement As A Tool To Drive Outcomes
We use our voice as a shareholder to impact corporate decision making
Pillar Company Engagement Topic(s) Outcome(s)
E
Multinational Energy Company
Emissions Intensity
Reduction Targets
• By 2023, the Company plans to cut methane emissions intensity by 20 – 25% and flaring intensity by 25 – 30% from 2016 levels.
• As of 2019, the Company w ill tie compensation for ~45,000 employees to meeting emissions reductions targets.
Japanese Trading Company
TCFD Reporting
Emissions Disclosures
• Integrated Report disclosures have been materially improving, and the company has committed to issue a fully quantif ied TCFD report w ithin the current f iscal year.
• Plan to deepen their GHG disclosures to Scope 3 (currently only Scope 1 & 2).
S Multinational Financial
Services Firm
Corporate Culture
Employee Benefits
• Published first Human Capital Management report outlining key initiatives and related data on topics such as gender pay equity and employee engagement.
• Recently added benefits for parental leave and adopted a higher than required minimum hourly w age.
• Implemented a policy restricting how the Company solicits compensation
information from candidates during the hiring process.
U.S. Softw are Company
Employee Recruitment & Retention
ESG Reporting
• Expanded ESOP to give more employees access to stock through grants and purchase plans in an effort to better align incentives and increase motivation.
• Moved headquarters to Boston to improve recruiting of young, tech talent.
• Produced latest sustainability report in-line w ith the GRI and SASB standards.
G Eastern European
Bank
Executive Compensation
IT & Cybersecurity Oversight
• Key ESG metrics w ere explicitly included into CEO compensation, w ith transparency around methodology and measurement.
• The company engaged E&Y to conduct an audit of its IT systems, with an emphasis on cybersecurity controls.
• IT & cybersecurity oversight was elevated to the Board level.
U.S. Telecom Company
ESG Oversight
ESG Reporting
• Board of Directors and executive leadership appointed their f irst Chief ESG Officer and created a cross-functional ESG team that includes subject matter expertise in
governance, environmental sustainability, human rights, digital trust, and safety.
• Published first ESG Report w ith SASB and GRI aligned indices and links to key
ESG data, alongside a stand-alone TCFD report.
Source: GSAM, as of March 31, 2019. For informational purposes only and should not be construed as research, investment advice or a recommendation. There is no g uarantee that these objectives will be met.
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26
Source: GSAM, as of March 31, 2020. Voting data for July 1, 2018 through June 30, 2019. For illustrative purposes only.
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
GSAM’s Global Proxy Voting Approach Robust and technologically enhanced approach to proxy voting
• GSAM’s Global Proxy Voting
Guidelines are updated annually to
incorporate evolving beliefs on key
corporate governance and ESG topics
• Changes are approved each year by
the Mutual Funds’ Boards
• For equities covered under the policy,
proxy voting is a key element of the
portfolio management process
• The GSAM Stew ardship Team drives
the continued enhancement of the
global proxy voting process
• The team w orks w ith internal
stakeholders, such as legal,
compliance, operations, investment
teams and the executive off ice to
ensure our policies allow us to make
voting decisions that are thoughtful
and not influenced by conflicts of
interest
• GSAM has retained a third-party
proxy voting service (ISS) to assist in
the implementation of proxy voting-
related functions, such as operational,
recordkeeping and reporting services
• Within this scope, ISS prepares a
w ritten analysis and recommendation
of each vote that reflects the
application of the GSAM Guidelines to
the particular proxy issues
• GSAM retains the responsibility for
proxy voting decisions
• Every vote is review ed by the
Stew ardship Team and the equity
investment team responsible for the
stock through our proprietary system,
Fluent
• GSAM generally cast votes in-line
w ith the Guidelines and
Recommendations
• Each team may seek approval to
diverge from the Recommendation by
follow ing a process that seeks to
ensure that override decisions are not
inf luenced by any conflict of interest
GSAM Proxy Voting
Guidelines
Stewardship Team
Oversight
Third-Party Voting
Services
Investment Team
Collaboration & Input
27
Source: GSAM, as of March 31, 2020. Voting data for July 1, 2018 through June 30, 2019. For illustrative purposes only. Please see the 2019 GSAM Stewardship Report on our website for additional information and case studies.
10,842
5,529
-
5,000
10,000
15,000
VotedAt Least 1 Vote Against Management Proposals
108,260
12,991
-
50,000
100,000
150,000
Voted Voted Against
Proxy Meetings Voted
Proposals Voted
100% Support for
Shareholder Proposal Related to:
E
S
G
Recycling 2 Degrees Analysis
Health Care Fair Lending
Declassify Board Proxy Access
Proxy Voting Policy Highlights
Board Diversity
Gender Pay Gap
Climate Change
• Vote against directors for lack of female
representation
• Voted against 312 directors at 214 companies for lacking at least one
woman
• Review proposals requesting
reports on policies concerning pay gap
• Supported shareholder
proposals on gender pay gap disclosures 93% of the time
• Strengthen voice around risks,
reduction of emissions and energy efficiency
• Supported shareholder proposals
on climate change disclosures 60% of the time
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2019 Global Proxy Voting Snapshot We’ve been raising the bar of our expectations from companies
Meetings by Voting Market
36%
25%
18%
15%
6% Americas
EmergingMarketsEMEA
Japan
Asia Pacific
28
Source: GSAM, as of March 31, 2020. For illustrative purposes only. Please see the 2020 Prox y Voting Policy on our website for additional information and case studies.
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
2020 Global Proxy Voting Updates GSAM’s Global Proxy Voting Guidelines are updated annually to incorporate evolving
beliefs on key corporate governance and ESG topics
Region 2019 Policy 2020 Policy Updates
Election of Directors –
Gender Diversity • Global
• Vote AGAINST/WITHOLD from the Nominating
Committee Chair if the board did not have at least
one w oman director in the last three years
• Policy w as US only
• Vote AGAINST/WITHOLD from the Nominating
Committee if the board does not have at least one
w oman director
• Applies to all geographies, full committee and no look back
Election of Directors –
Independence • Japan • No policy
• Directors w ill not be considered independent if they
w ork, or have w orked, at companies w hose shares
are held by the company in question as strategic
shareholdings (i.e. cross-shareholdings)
Shareholder Rights –
Majority Voting / Simple
Majority
• Global • No policy
• In the case of operating and holding companies,
vote AGAINST proposals to require a supermajority
shareholder vote
• Generally vote FOR management and shareholder proposals to reduce supermajority vote
requirements
Operational • Global • No language
Added language to clarify processes related to:
• Securities Lending
• Vote Disclosures
• Proxy Advisor Due Diligence
• Conflicts of Interest
29
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The portf olio risk management process includes an ef f ort to monitor and manage risk, but does not imply low risk. Opinions ex pressed are current opinions as of the date appearing in this
material only .
This inf ormation discusses general market activ ity , industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or inv estment
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Portf olio holdings and/or allocations shown abov e are as of the date indicated and may not be representativ e of f uture inv est ments. The holdings and/or allocations shown may not represent all
of the portf olio's inv estments. Future inv estments may or may not be prof itable.
Env ironmental, Social, and Gov ernance (“ESG”) strategies may take risks or eliminate exposures f ound in other strategies or broad market benchmarks that may cause perf ormance to div erge
f rom the perf ormance of these other strategies or market benchmarks. ESG strategies will be subject to the risks associated with their underly ing inv estments’ asset classes. Further, the demand
within certain markets or sectors that an ESG strategy targets may not dev elop as f orecasted or may dev elop more slowly than anticipated.
Disclosures
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC
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Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as
up. A loss of principal may occur.
Personnel inv olv ed in the GSAM ESG and impact ("Imprint") ef f ort are comprised of members of our GSAM Quantitativ e Strategies , Fundamental Equity , Fixed Income, and Alternativ e
Inv estments and Manager Selection (AIMS) teams which are distinct groups. An inf ormation barrier exists between GSAM teams that manage internal strategies and external ("open architecture")
strategies. AIMS Imprint is a part of the Alternativ e Inv estments and Manager Selection (AIMS) Group. The AIMS business is self -contained within its own inf ormation barrier within GSAM.
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connection with any securities transaction that is unrelated to the transaction(s) f or which the inf ormation was intended to be used.
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Additional Disclosures
FOR CLIENT USE ONLY. NOT FOR USE AND/OR DISTRIBUTION TO YOUR CLIENTS OR THE GENERAL PUBLIC