Wall Street’s most prestigious investment bank Goldman Sachs has launched an investment instrument tied to companies driving the green transition.
The Clean Energy Equity ETF started trading on Thursday under the ticker GCLN. The fund will track an index made by Bloomberg comprising of companies that generate renewable power or involved in green infrastructure.
Some of the companies tracked by the fund will be fossil fuel generators hoping to transition to renewable sources.
More and more investors are moving their capital away from carbon-intensive assets. They anticipate diminishing demand for fossil fuels as the world switches to renewables.
The launch of Goldman Sachs’ clean energy ETF is the latest installment in a joint initiative outlined last year by CEOs David M. Solomon and Michael Bloomberg to capitalize on opportunities generated by the transition to clean energy.
Goldman and Bloomberg announced last year that they will launch an innovation fund to deploy capital to energy transition projects across developing markets. The initiative would place a special focus on South and Southeast Asia, according to an article authored by Goldman Chief Executive David M. Solomon and Bloomberg founder and owner Michael Bloomberg.
Goldman is not the first bank to launch such a fund – there are around 30 others already trading on American exchanges alone. But the participation of a top-tier investment bank lends credibility to the practice, and suggests that green investing is gaining popularity.
