As part of a new environmental policy at the investment bank, Goldman Sachs will focus on developing new models and use-cases for catastrophe bonds, aiming to help clients mitigate climate risk impacts as well as for financing resilience.
Goldman Sachs has been a leading structuring and investment banking firm in the catastrophe bond space since the market began in the mid to late 1990’s, driving institutional investor capital into the asset class through its bookrunning services.
Catastrophe bonds continue to shift beyond simply being a diversifying source of insurance or reinsurance capacity for insurers or reinsurers, with them increasingly seen as a way to transfer climate, weather and catastrophe risks for sponsors such as public entities and corporates.
Goldman Sachs is set to focus not just on bringing risk transfer and risk capital to those bearing risks using cat bonds, but also to explore the links between risk transfer and resilience, developing new models for catastrophe bonds to be applied to.
In total, just over the last ten years since 2006, Goldman Sachs has structured over $14 billion worth of catastrophe and weather linked catastrophe bonds, making it among the most prolific capital markets service providers to the sector and the leading investment bank, according to Artemis’ data and chart here.
As part of a new environmental policy for the next ten years Goldman Sachs says it will work to increase the use of environmental financing, such as green bonds and clean energy investments, to around $150 billion. It will also work to facilitate climate risk transfer, citing catastrophe bonds and resilience financing as initiatives it intends to commit to grow....MORE