Who are Goldman Sachs, What are the UN's Sustainable Development Goals & Why should we care?

Who are Goldman Sachs?

Goldman Sachs was founded in 1869, and is a global investment banking, securities and investment management firm (Goldman Sachs, 2023). They are a global systemically important bank, this means that should they collapse, it would cause a serious risk to the economy. They are viewed as "too big to fail", therefore they must adhere to extra regulations to stop it from going under (Bank for International Settlements, 2022).

In 2021, Goldman Sachs joined the UN Principal for Responsible Banking (UN PRB). The goal of the UN PRB is to ensure that banks align with the UN's Sustainable Development Goals. They committed to conducting an impact analysis of their activities, to set continuous targets and publicly report on their progress. They have pledged to follow the UN PRB six principals, to have the framework for a sustainable banking system to aid the UN in meeting these goals (Goldman Sachs, 2021).

The UN's Sustainable Development Goals

The United Nations Sustainable Development Goals (SDG's) are a set of 17 goals that the UN intends to reach by 2030. They were put in place with the aim of giving dignity, peace and prosperity to all people and to the planet (United Nations, 2022). Over the course of the next few weeks, I will be posting various blog post's focusing on 3 of these goals:

1. No Poverty

                                (Source: YouTube)

Prior to the COVID 19 pandemic and the Ukraine war it was projected that 6% of the global population would be living in extreme poverty by 2030, it is now predicted to be 7% (United Nations, 2022). These tragic events coupled with subdued global economic growth have not only completely erased the UN's efforts, but the poverty levels are now worse than before they started. With the poorest 40% of society seeing a 4% decrease in annual income according to the World Bank (The World Bank, 2022).

So, what does this mean for you? Economist Dani Rodrik said, "Historically nothing has worked better than economic growth in enabling societies to improve the life chances of their members, including those at the very bottom"(Rodrik, 2007). Poverty feeds into growing inequality and is detrimental to economic and social growth. Economic growth increases a country's tax base which in turns increases government expenditure for public services like education, social care and health care. It also provides low-income individuals with the ability to pay for services to improve their overall wellbeing and invest in higher education to further close the wealth gap (Dollar & Kraay, 2002). So, by ending poverty, a continuous loop of growth is created, which will benefit everyone.

2. Decent Work and Economic Growth

                                (Source: YouTube)

The COVID 19 pandemic created one of the worst economic crises in decades that overturned a large amount of work that the UN has done to promote inclusive and sustainable economic growth, employment and decent work for all. In 2021 there was great strides in the recovery of the global GDP, unfortunately the Ukraine crisis further impeded the UN's goal making this goal more important than ever (United Nations, 2022).

So, what does this mean for you? The global economic recovery is impeded by the rising inflation rates, policy uncertainties and labour market challenges to name a few. This means the cost of living is dramatically rising but the average person's wages aren't increasing in line with inflation. A direct result of this is that an additional 9 million children are at risk of being pulled out of education and into work to help their families keep up with these rising costs (United Nations, 2022). This goal will aid the UN in reaching their first goal by creating decent work opportunities for all, this will help end the poverty cycle by giving adults a fair income and workplace security allowing their children to stay in education.

3. Industry, Innovation and Infrastructure 

                                (Source: YouTube)

The goal focuses on building resilient infrastructure, promoting sustainable industrialisation and to foster innovation. The COVID 19 pandemic highlighted the importance of this goal, countries with a strong infrastructure and a diversified industrial sector have showed a much faster recovery and experienced less damage than economies without. Least developed countries (LCDs) have had a slow recovery post-pandemic due to tighter economic policies, volatile global demand and trade disruptions (United Nations, 2022).

So, what does this mean for you? According to the World Bank, a good infrastructure system is fundamentally important to economic growth, as investments in the likes of transport, energy and telecommunication are all essential inputs to produce goods and services (World Bank, 2022). A solid infrastructure then nurtures innovation and industrialisation, this creates economic growth, job opportunities and upskilling. This reduces poverty levels and increases the standard of living for all people.

Over the course of the next four weeks, we will be looking at how Goldman Sachs can play a role in helping the UN meet these three goals. Discussing initiatives, they have put in place and analysing them to see what effects they are actually having in the real world.  

Reference List

Bank for International Settlements, 2022. The G-SIB framework – Executive Summary. [Online]
Available at: https://www.bis.org/bcbs/gsib/
[Accessed 12 February 2023].

Dollar, D. & Kraay , A., 2002. Growth is Good for the Poor. Journal of Economic Growth, 7(3), pp. 195-225.

Goldman Sachs, 2021. Integrating Sustainability with Purpose across Our Business, New York: Goldman Sachs.

Goldman Sachs, 2023. Goldman Sachs. [Online]
Available at: https://www.goldmansachs.com/
[Accessed 12 February 2023].

Rodrik, D., 2007. One Economics, Many Recipes. 1st ed. New Jersey: Princeton University Press.

The World Bank, 2022. Global Progress in Reducing Extreme Poverty Grinds to a Halt. [Online]
Available at: https://www.worldbank.org/en/news/press-release/2022/10/05/global-progress-in-reducing-extreme-poverty-grinds-to-a-halt
[Accessed 12 February 2023].

United Nations , 2022. The Sustainable Development Goals Report, New York: United Nations.

United Nations, 2022. Facts and Figures. [Online]
Available at: https://www.un.org/sustainabledevelopment/economic-growth/
[Accessed 12 February 2023].

United Nations, 2022. https://sdgs.un.org/goals/goal1. [Online]
Available at: https://sdgs.un.org/goals/goal1
[Accessed 12 February 2023].

United Nations, 2022. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. [Online]
Available at: https://sdgs.un.org/goals/goal8
[Accessed 12 February 2023].

World Bank, 2022. How does infrastructure support sustainable growth?. [Online]
Available at: https://blogs.worldbank.org/digital-development/how-does-infrastructure-support-sustainable-growth
[Accessed 12 February 2023].