Greenflation,ReturnsandOpportunityTheRussia-Ukrainewar,inflation,recognitionoftheneedforenergyreliabilityandrisinginterestratesaredrivingdebatesaroundhowprivatesectorandpublicsectorcommitmenttoGreenCapexwillevolveandwhetherthisraisesorlowerstheattractivenessofinvestmentopportunitiestowardsachievingNetZero,InfrastructureandCleanWatergoals.WecontinuetoseeGreenCapexasanunderappreciatedseculargrowthtrendasinvestmentsrisetowardsDecarbonization,InfrastructureandCleanWatergoals.Evenastheincremental$2.8trillioninannualinvestmentneededthisdecadevs.2016-20isnotfullyontrack:(a)capex+R&Dmedium-termgrowthexpectationshaverisenoverthepastsixmonths,bothonanabsolutebasisandmodestlyrelativetooperatingcashflow;and(b)governmentsappearmorecommittedtoincreasingorstimulatingGreenCapex,particularlyinEurope.Webelievecorporatereturnsandforwardcorporatereturnsmomentumwillbeakeydriverofstockperformance,andinthisreportwepresentscreensthathighlightsectorswhereweseefavorable,resilientand/orimprovingcorporatereturnsleveredtotechnologiesneededintheGreenCapexmosaic.GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgotowww.gs.com/research/hedge.html.Analystsemployedbynon-USaffiliatesarenotregistered/qualifiedasresearchanalystswithFINRAintheU.S.EQUITYRESEARCH|June27,2022|10:19AMEDTTheGoldmanSachsGroup,Inc.GREENCAPEXEnricoChinello,Ph.D.+1(212)357-3398|enrico.chinello@gs.comGoldmanSachs&Co.LLCBrianSinger,CFA+1212902-8259brian.singer@gs.comGoldmanSachs&Co.LLCDerekR.Bingham+1(415)249-7435derek.bingham@gs.comGoldmanSachs&Co.LLCMichaelHaoWu,CFA+1(917)343-1137|michael.h.wu@gs.comGoldmanSachs&Co.LLCSharminiChetwode,Ph.D.+852-2978-1123sharmini.p.chetwode@gs.comGoldmanSachs(Asia)L.L.C.EvanTylenda,CFA+44(20)7774-1153evan.tylenda@gs.comGoldmanSachsInternationalMadelineMeyer+1212902-5513madeline.r.meyer@gs.comGoldmanSachs&Co.LLCKeebumKim+852-2978-6686keebum.kim@gs.comGoldmanSachs(Asia)L.L.C.BrendanCorbett+1(415)249-7440brendan.corbett@gs.comGoldmanSachs&Co.LLCEmmaJones+6129320-1041emma.jones@gs.comGoldmanSachsAustraliaPtyLtdNote:ThefollowingisaredactedversionoftheoriginalreportpublishedJune13,2022[54pgs].PMSummary3GreenCapexneedsremainrobust:Updatingwhatwebelieveisontrack8Capex+R&Dexpectationshavemovedhigherinrecentmonths,withmodestincreaseinreinvestmentrate12Implicationstocorporatereturns:Mixedoverall,butstillfavorablemomentumincomingyearsamongGreenCapexsectors16GreenCapexsparecapacityhasexpanded,butmoreconcentratedinoil/gas21Economicgrowthandconsumerimpactarekeyrisks25InnovationcouldaccelerateinCleanReliableEnergyandEnergyEfficiencyasaresultofgreaterdeployment29Policysupportleadingtoriseinlong-terminvestmentinEurope32Sectorsthatstandoutpostourlatestupdate37GreenCapexincreaseshavenotbeenappreciatedinstockpricesoverthepastsixmonths41HowGSSUSTAINcanhelp43DisclosureAppendix46ThefollowingisaredactedversionofGoldmanSachsResearch’sreport“GreenCapex:Greenflation,ReturnsandOpportunity”originallypublishedJune13,2022(54pgs).Allcompanyreferencesinthisnoteareforillustrativepurposesonlyandshouldnotbeinterpretedasinvestmentrecommendat...