Goldman Sachs Asset Management (GSAM) has announced the first of its European money market funds to apply ESG enhancements.
The fund will continue to operate as a Low Volatility NAV money market fund under the European regulation which became effective during Q1 of this year. It has now applied ESG enhancements by implementing exclusions screens and a corporate engagement strategy aligned with GSAM's dedication toward diversity and inclusion.
The strategy will screen out issuers that earn revenue from certain sectors including, but not limited to, controversial weapons, tobacco, certain fossil fuels and issuers deemed in violation of the UN Global Compact Principles.
In addition, GSAM will engage with issuers based on diversity metrics such as percentage representation of women on boards. This approach reflects GSAM's strong focus on diversity and inclusion, and signals the opportunity to discuss other diversity-related challenges that also will be covered as part of the engagement process.
Over the coming months, GSAM is planning to roll out a similar approach on other money market funds as ESG continues to garner further interest.
Kathleen Hughes, global head of the Liquidity Solutions Client Business at GSAM and member of the Goldman Sachs Sustainable Finance Cross-Divisional Steering Group, said: "Our global clients are demanding more focus be placed on ESG investments, there is appetite from many different investor types across the globe. ESG is becoming a pre-requisite rather than a nice to have. We believe the enhancements we have made to our Euro money market fund will resonate with investors looking for a cash solution that is considerate toward ESG and look forward to rolling this out across other currencies in future."