It's Not Easy Being Green

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Another treehugger fracas is brewing on Wall Street. Or, rather, Broad Street. In recent weeks, the Texas Pacific Group and Blackstone have been accused of caving to environmentalists—or worse, going native with the greens—in order to win support for their buyout of TXU.
This time it's Goldman Sachs that is catching flak. The Free Enterprise Action Fund—a mutual fund with a free market political agenda—has won the support of proxy adviser Institutional Shareholder Service for its anti-Goldman treehugger shareholder proxy. The proposal was filed because, according to the captains of the starship Enterprise):

Goldman's past actions appear inconsistent with its own Environmental Policy, which states: "We can make a significant positive contribution to… sustainable forestry… through market-based solutions;" and "In pursuing [sustainability] we will not stray from our central business objective of creating long-term value for our shareholders…"

Like so much else that is wonderful about the world, this bit of trouble starts in Patagonia. The Free Enterprisers are ticked that Goldman gave 680,000 acres of land in Tierra del Fuego, Chile to an environmental group in order to "best…maximize the value of the land." They say Goldman blocked what would have been a "sustainable forestry plan regarded by experts as highly innovative, pro-environment, and unprecedented in both scale and promise…[under the ownership of] U.S.-based Trillium Corporation…depriving the world of a pioneering and much-needed example of large-scale sustainable development and because it would have considerably helped the depressed local economy."
But the main point isn't really some pasture at the end of the earth. It's what it says about Goldman, or, as the Enterprisers put it, the Chile giveaway may "raise red flags about its involvement with future projects related to the environment." (Also: interesting that the truly anti-environment group (the Enterprise is upset that Goldman didn't got for an environmentally sound deal that would cut down trees) is posturing its argument so as to claim that Goldman are the ones who are anti-enviroment. It's like we've always said: a little double-speak never hurt anyone).
Hello! We're back in TXU-land again. Communications officer, or something, of the Enterprise, Tom Borelli, added that "Shareholders and the environment lost out in the Chilean land deal. As shareholders in both Goldman and TXU, we want to make sure that history doesn't repeat itself with the TXU buyout and other environment-related projects."
The Free Enterprise may be making too much of a big deal out this, as it all happened back in 2004, when Mr. Treehugger himself, Hank Paulson, was in charge. Now that Lloyd Blankfein, whose purportedly* flagrant use of Styrofoam is off the charts, is in office, they should have less to worry about.
Next up: a shareholder proposal to get rid of those damn hybrids. It's un-American. What's the point of being an investment banker if you don't get to ride home in a real town car at 4 am?
ISS Urges Social Investors to Support Sustainability Shareholder Proposal at Goldman Sachs; Free Enterprise Action Fund Questions Goldman’s Role in TXU Buyout [Advocacy Ink]
*Purportedly, presumably, completely made-up, whatever.

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