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The chief executive of Goldman Sachs has refused to yield to pressure from climate activists calling for the bank to stop financing oil and gas companies.
“Traditional energy companies are hugely important to the global economy, they are hugely important to Goldman Sachs,” David Solomon said at the American Energy Security Summit in Oklahoma this week, as quoted by Bloomberg. “We are all going to continue to finance traditional companies for a long time.”
Pressure on banks from climate activists has been growing and many have in one way or another succumbed to it, committing to curbs in their exposure to the oil, gas, and coal industry. No major bank, however, has gone the whole nine yards to stop doing any business with the energy industry.
Pressure has in some cases been so strong that banks have given up on certain projects. The most recent and quite notable case is that of the East African Crude Pipeline, a $5-billion project that will transport crude from landlocked Uganda to the Eastern African coast of Tanzania.
Climate activists applied such pressure on Western banks that were going to take part in the funding of the project that they gave up and were replaced by Chinese lenders.
In Europe, banks have already begun tightening their conditions for lending to the oil and gas industry in line with climate activist calls and government net-zero plans. As a result, the local supply of oil and gas has suffered further.
This is not yet the case in the United States but pressure remains significant on Wall Street to get more active in what effectively comes down to punishing the oil and gas industry for producing oil and gas.
Meanwhile, however, Solomon noted during his speech in Oklahoma that what he called traditional energy companies needed to be supported because without energy security “society won’t function.”
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.