Green Bonds for Green ICT
Apple recently issued a "Green Bond". What is this new kind of debt instrument and how might it propel Green ICT?
The Climate Bonds Initiative reports, "The green bond market took off in 2014 with $36.6bn issued; triple the amount issued in 2013 ($11bn)."
The International Capital Market Association (ICMA), whose Green Bond Principals Apple cites, offers this definition: "Green Bonds are any type of bond instruments where the proceeds will be exclusively applied to finance or re-finance in part or in full new and/or existing eligible Green Projects and which follows the 4 Green Bond Principles." It appears that the primary purposes of Green Bonds is to attract socially-responsible investors and to make a corporate statement. There does not appear anything in the financial terms that differentiate Green Bonds from more common corporate debt offerings.
Eligible projects for Apple' Use of Proceeds are investments that would make any company and its products more sustainable. Most are targeted at facilities and operations. One of interest to ICT product purchasers is "...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 Climate Bonds Initiative is one organization that does address Green Bonds Use of Proceeds for ICT. This is a good start in a financial services sector that is otherwise poorly focused on Green ICT, but you can see from the Initiative's "ITC" chart (right) that this has not captured the full breadth of Green ICT opportunities. It certain does not encompass the Total ICT approach that I presented in my recent keynote talk, Green ICT - Bigger Than We Ever Imagined.
Greater awareness of Green ICT opportunities within the Green Bond community should lead to more interest in Green Bonds from ICT manufacturers.
Image courtesy of Climate Bonds Initiative