This week Apple Inc. issued $1.5 billion in green bonds as part of a larger bond issuance. The green bonds will support Apple’s use of renewable energy like solar power (which it is using at data centers and other locations) as well as support its energy efficiency efforts and efforts to reduce volatile materials in its electronics. It’s said to be the largest green bond issuance to date.
The bonds are another way that corporations can use to finance solar power and renewable energy. It will help the company install or buy power from solar panel farms like Apple’s 40 megawatt solar farm at its datacenter in North Carolina. It’s also purchased solar power from other installations and is installing solar on its new headquarters in California.
"This will allow investors to show they will put their money where their hearts and concerns are," Lisa Jackson, Apple's vice president of environment, policy and social initiatives, told Reuters.
The bonds will mature in 2023, according to Apple’s SEC filing for issuance of the bonds. The issuance is part of a larger, $10 to $12 billion bond issuance. The bonds, which should pay 2.85 percent over the next 7 years. They received an Aa1 rating from Moodys. Sean Kidney CEO of the Climate Bonds Initiative said it is part of the second biggest bond offering of 2016, thus far.
“In a boost for the corporate green bond market Apple has followed the pre and post issuance review model (in line with the Climate Bonds Standard) by committing to a second review from Sustainalytics prior to issuance and post issuance assurance from an audit firm,” Kidney said.
“Our Environment, Policy and Social Initiatives team will assess and determine project eligibility on a semi-annual basis and recommend an allocation of proceeds to eligible projects. The final allocation of net proceeds to eligible projects will be approved by our Vice President of Environment, Policy, and Social Initiatives,” Apple stated in its SEC filing.
Apple said it will invest in projects where it can make the most environmentally positive impacts. It stated these would include: Expenditures related to new and ongoing renewable energy projects, such as solar and wind projects, or associated energy storage solutions and expenditures related to projects that have received within the last three years, or are expected to receive, certification of LEED Gold or Platinum or BREEAM Very Good, Excellent, or Outstanding “green building” standards.
“This positive signal to future U.S. corporate issuers not only about green bonds but also that getting an independent review on the green credentials is a fairly standard process,” Kidney said. He added, “There is a lot of potential for the US corporate green bond market and we expected it kick off in 2015. Clearly it didn’t get the momentum last year but with Apple leading the way this year we may see a ramping up of the market.”