Apple Issues a Green Bond
Vertatique has covered much innovation in Green ICT technology and practices. Now, we get to look at green ICT financing as Apple issues a Green Bond.
Apple announced the $1.5 billion debt instrument in a February 2016 filing with the Securities and Exchange Commission (SEC), the the American regulatory agency for such matters. Apple's SEC filing contains interesting about the concept of a Green bond and the company's planned use of proceeds. We will exerpt it here, because this information is buried in a very lengthy technical document.
Please refer to the filing itself, not our exerpt, for quotation or other use.
We plan to identify Eligible Projects that fall within three environmental priorities where we believe we can make the most environmentally positive impact:
1. Reduce our impact on climate change by using renewable energy sources and driving energy efficiency in our facilities, products and supply chain.
2. Pioneer the use of greener materials in our products and processes.
3. Conserve precious resources.
“ Eligible Projects ” means projects that meet the Eligibility Criteria (as defined below).
“ Eligibility Criteria ” means any of the following:
• expenditures related to new and ongoing renewable energy projects, such as solar and wind projects, or associated energy storage solutions,
• 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,
• expenditures related to the implementation of environmental design elements for new or ongoing building developments, such as high performance mechanical systems, natural ventilation, on-site renewable energy, and high performance lighting systems,
• expenditures related to energy efficiency projects and technologies at our corporate facilities, such as heating, ventilation and air conditioning systems upgrades, lighting retrofits and energy monitors and controls,
• expenditures related to water efficiency projects and technologies at our corporate facilities, such as upgrades to water efficient fixtures and water efficient irrigation and increased use of recycled water,
• expenditures related to projects that enhance recycling, material recovery and reuse, and landfill waste diversion for our products and facilities, and
• expenditures related to projects and technologies that facilitate the use of greener materials in our products, through (i) the use of bio-based materials, (ii) the use of recyclable materials or (iii) the elimination of toxic substances that are commonly used in the industry in accordance with our Regulated Substances Specification (available at http://www.apple.com/environment/reports/ ).
The Green Bond Principles 2015 are a set of voluntary guidelines for the issuance of green bonds developed by a committee made up of issuers, investors and intermediaries in the green bond market. The Green Bond Principles 2015 have four components: (i) use of proceeds for qualifying projects with environmentally sustainable benefits, (ii) disclosure and use of a process for project evaluation and selection, (iii) management of proceeds through a formal process to ensure they are allocated to qualifying projects and (iv) reporting on the use of proceeds, including on the projects for which funds have been used and their expected environmentally sustainable impacts. We are in alignment with these components and intend to implement the following guidelines:
• work with an outside consultant with recognized expertise in environmental, social and governance research and analysis to develop our Eligibility Criteria and processes for compliance with the Green Bond Principles and annually obtain and make publicly available a second party opinion from such consultant in respect of compliance with such criteria,
• obtain annual assertions by management that the net proceeds of the offering of the 2023 Fixed Rate Notes were allocated to qualifying Eligible Projects, and
• obtain an annual report from an independent registered public accounting firm in respect of its examination of management’s assertions conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
During the term of the 2023 Fixed Rate Notes, until such time as the net proceeds from such notes have been fully allocated to Eligible Projects, these materials and annual update reports will be published annually on Apple’s website at http://investor.apple.com (which will be available to investors within one year from the date of issuance of the 2023 Fixed Rate Notes).
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.
Pending allocation of the net proceeds from the sales of the 2023 Fixed Rate Notes to Eligible Projects, we will temporarily invest an amount equal to the balance of such net proceeds in cash, cash equivalents and/or U.S. treasury securities. Payment of principal and interest on the 2023 Fixed Rate Notes will be made from our general funds and will not be directly linked to the performance of any Eligible Project. We intend to spend the majority of the net proceeds from the sales of the 2023 Fixed Rate Notes within two years of the date of issuance.