(Bloomberg) –Goldman Sachs Group Inc. has tightened its policy on fossil fuel financing in a move welcomed by environmental groups, just as global talks on climate change faltered in Madrid over the weekend.

The Wall Street firm’s recently updated environmental policy framework includes pledges to decline financing that directly supports new thermal coal mines and upstream Arctic oil exploration and development. The company is targeting $750 billion for “climate transition and inclusive growth finance” over the next decade, according to its website.

Goldman’s stricter stance came as climate discussions in Madrid reached a disappointing end, with delegates from almost 200 nations watering down language on issues they had agreed on in previous years. While agreeing on the “urgent need” for countries to make deeper cuts to greenhouse gases, they shelved work on adding market mechanisms to meet their goals and failed to agree on finance needed to fix the problem.

An increasing number of global banks have been reducing their lending to the coal industry, a leading contributor to greenhouse gas emissions, and increasing financing for renewable energy.

The Rainforest Action Network and the Sierra Club said that the revisions on fossil fuel financing make Goldman’s policy “now the strongest among the big six U.S. banks,” while still behind those of European lenders including Credit Agricole SA and BNP Paribas SA. The move to rule out Arctic oil projects marks “a crucial first step, among U.S. banks, on ending financing expansion of oil and gas,” the groups said in a joint statement.

Chief Executive Officer David Solomon touted Goldman’s plans for more sustainable funding in an op-ed in the Financial Times.

“Over the next 10 years, Goldman Sachs will target $750 billion of financing, investing and advisory activity to nine areas that focus on climate transition and inclusive growth,” he wrote. They include clean energy and transport, sustainable food and agriculture, and education.

Goldman’s new policy also included pledges to:

• decline financing projects of new coal-fired power plants in developing nations — a commitment that previously only applied to the U.S. and developed countries — unless they have carbon capture and storage or equivalent emissions reduction technology
• engage with thermal coal mining companies on their plans to diversify away from the fossil fuel, and phase out financing for any that don’t have such strategies “within a reasonable timeframe.”

Solomon also urged governments to create a mechanism for putting a price on the cost of carbon — something that the officials in Madrid failed to do.

Still, he added that “the world will continue to produce and use fossil-based fuels, aeroplanes, cars and industrial goods, and Goldman Sachs will continue to support clients in transactions that are important to economic activity.”

–With assistance from Emily Cadman, David Stringer and Rob Verdonck.