Note:The following is a redacted version of the original report published July 25,2023 [27 pgs].25 July 2023 4:48PM EDTGS SUSTAIN:Avoided EmissionsHow quantifying Avoided Emissions can broaden thedecarbonization investment universeWhile investing in climate solutions has been one of the most dominant themesBrian Singer,CFA+1(212)902-8259 |brian.singer@gs.comamong Sustainability investors in recent years,ESG ownership still continues to beGoldman Sachs Co.LLClargely concentrated in a subset of more-obvious pure play solution providers,mainlyKeebum Kim+852-2978-6686 keebum.kim@gs.comsolar/wind/water.We believe this has been in part driven by relative lack of metricsGoldman Sachs (Asia)L.L.C.available to help investors quantify the impact of less-obvious enablers acrossBrendan Corbett+1415)249-7440multiple industries ranging from Industrials,Materials to Technology.However,ourbrendan.corbett@gs.comGoldman Sachs Co.LLCanalysis suggests that since 2010,Energy Efficiency has helped to reduce 50%Emma Jonesmore carbon emissions than renewables generation additions.We believe as+61(2)9320-1041|emma.jones@gs.comGoldman Sachs Australia Pty LtdSustainable Investing continues to shift From Aspiration to Action,investors will lookXavier Zhangto quantify impact,with rising interest in Avoided Emissions for relevant sectors.In+852-2978-6681 xavier.zhang@gs.comGoldman Sachs (Asia)L.L.C.this report,we discuss why we believe incorporating Avoided Emissions intoDerek R.Binghaminvestment decisions could help identify underappreciated enablers in the+1415)249-74351ecosystem of Green Solutions.Evan Tylenda,CFA+4420j774-11531Avoided emissions impact of Building Insulation and SemiconductorsBoth Building Insulation and Semiconductors can contribute to AvoidedMadeline MeyerEmissions by enabling end-consumers to save more energy.Our new analysissuggests Building Insulation could help avoid 20X-100X more emissions thanGrace chenthey emit.As per our prior analysis,we believe Semiconductors could help avoid+4420177-5119gracej.chen@gs.comat least 5X their own footprint.Varsha Venugopal+1415)393-7554Methodology and application of Avoided Emissions analysis likely to see increasedfocusDespite the challenging data landscape and lack of conclusive methodologies,webelieve preliminary analysis of Avoided Emissions can still be additive to theinvestment process when applied to industries with strong ties to energy efficiency.which has played a critical role in enabling global Avoided Emissions in recentdecades.We discuss early guidelines set by the WRI and WBCSD on how investorscan start to measure Avoided Emissions,and provide examples of how corporatesand investors are currently leveraging Avoided Emissions to communicate theirimpact.Goldman Sachs does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of thisreport.Investors should consider this report as only a single factor in making their investment decision.For Reg ACcertification and other important disclosures,see the Disclosure Appendix,or go toww.gs.com/research/hedge.html.Analysts employed by non-US affiliates are not registered/qualified as researchanalysts with FINRA in the U.S.Goldman SachsGS SUSTAIN:Avoided EmissionsTable of ContentsPM Summary3Scope 4:The next frontier of emissions boundaries that could help quantify the impact of underappreciatedenablers7Energy Efficiency:A significant enabler of avoided emissions10General frameworks to measure avoided emissions12How are companies and asset managers currently assessing avoided emissions?18GS SUSTAIN analysis on avoided emissions from Building Insulation and Semiconductors20Disclosure Appendix23The following is a redacted version of Goldman Sachs Research's report "GS SUSTAIN:Avoided EmissionsHow quantifying Avoided Emissions can broaden the decarbonization investment universe"originallypublished Jul.25 2023(27pgs).All company references in this note are for illustrative purposes only andshould not be interpreted as investment recommendations.25Juy20232