Verizon issues $1B in green bonds to fund companywide environmental initiatives

Verizon issued $1 billion in green bonds on Friday, and it plans to use the proceeds to fund various sustainability initiatives including renewable energy, green buildings, energy efficiency, and sustainable water management. Verizon anticipates that a majority of the funds will be allocated within three years.

The demand from environmental, social and governance (ESG) investors was substantial enough to enable Verizon to price the bond at a lower cost than its traditional bonds, said Jim Gowen, Verizon’s chief sustainability officer, in an email to Fierce.

“I’m very pleased to share that proceeds from the $1 billion of 10-year green bonds will support several green 5G-related projects in Verizon’s pipeline,” said Gowen. “For example, one area of focus is smart cities where Verizon will use 5G to enable more efficient waste management, smart parking and smart lighting. For smart homes, Verizon’s goal is to use 5G to achieve enhanced energy management, smart metering and leak detection.”

The company already has sustainability initiatives in place. For example, Gowen said in 2017 the company implemented several strategies to increase energy efficiency in its larger wireless core data centers, including uninterruptible power supplies, high-efficiency motors, and whole-building control systems.

RELATED: Telefónica issues telecom sector's first 'green bond'

Telefonica recently announced a green bond and said it was saving energy by converting from copper to fiber. The Spanish operator said with its FTTH deployments, it saved 208 Gigawatt hours over the past three years, which means avoiding the emission into the atmosphere of 56,500 tons of CO2, equivalent to the carbon captured by more than 900,000 trees.

Asked if any of Verizon’s green bond funds would be used to transition to more fiber, Gowen said,  “This is a different and unique offering.” Verizon will use the funds for the aforementioned environmental initiatives.

But he did point out that Verizon has been an industry leader in fiber deployment. “Consider our more than $1 billion purchase agreement with Corning, and other fiber-purchase deals we announced more than a year ago with Prysmian and WideOpenWest.

“As you know, fiber is more durable and has lower environmental impact than copper,” he added. “In addition, the throughput of fiber is so much greater than that of copper that it’s fair to characterize Verizon’s network as already fiber-based.”

Globally, more than 50% of the electricity used by Telefónica comes from renewable sources. And it has stabilized its energy consumption despite the fact that traffic has grown 107% in the last three years.

For its part, Verizon recently announced a goal to have 50% of its electric usage backed by renewable generation by 2025, which is about 2,000 MW.