First ESG-linked demand deposit account

29 September 2021

Goldman Sachs Transaction Banking Services has launched a new ESG (Environmental, Social and Governance) linked demand deposit account, with global water technology company, Xylem, as its anchor client, the two companies announced.

The new Goldman Sachs Transaction Banking (TxB) product links the yield clients earn on their deposits to the achievement of their own ESG targets. ESG-focused companies, like Xylem, stand to earn higher yields as they deliver on their sustainability strategies. The product is structured as a demand deposit account, so clients can access liquidity whenever they need it.

Xylem, recognized as a leader in sustainability, is adding the ESG-linked deposit account to its suite of green financing tools. In 2019, Xylem executed an $800 million revolving credit facility with a sustainability-linked pricing mechanism, the first of its kind in the US General Industrial Sector. In 2020, it completed a $1 billion green bond offering, the proceeds of which were allocated to projects that improve water security and advance sustainability.

The new offering aligns with nine investment themes that underpin Goldman Sachs’ sustainability framework: clean energy, sustainable transport, sustainable food and agriculture, waste and materials, ecosystem services, accessible and innovative healthcare, accessible and affordable education, financial inclusion, and communities. Goldman Sachs’ sustainable finance commitment includes a target to deploy $750 billion across climate transition and inclusive growth by 2030.

Courtesy of Xylem.