Visa prices $500m green bond to assist with low-carbon transition
Visa has launched its inaugural green bond, priced at $500m. It will be used to help the company achieve its decarbonisation aims and its alignment with the UN's Sustainable Development Goals (SDGs).
The green bond is believed to be the first issued by a digital payments network and will mature in August 2027.
It will be used to finance an array of projects designed to reduce Visa’s greenhouse gas (GHG) emissions, including building upgrades, energy efficiency schemes and renewable energy. On the latter, Visa met its 2020 target to use 100% renewable energy across its global operations back in January and is now looking to install more onsite arrays and forge additional Power Purchase Agreements (PPAs), which it sees as preferable to changing tariffs or purchasing certificates, which do not guarantee additional capacity installations.
Proportions of the funds raised by the bond will also be allocated to water efficiency projects like waterless cooling, water reuse systems and low-flow fittings, as well as to programmes designed to minimize emissions from employee commuting. Visa’s efforts to drive behaviour change outside of its operations will also be accelerated by the bond.
Information on the use of the proceeds from the bond will be reported annually by Visa, with the company set to track the positive environmental impact of all projects financed in this way. This information will be vetted by a third party, to ensure the bond is delivering on Visa’s green bond framework and the ICMA’s Green Bond Principles.
To coincide with the launch of the bond, Visa has appointed its first chief sustainability officer. Douglas Sabo has served within the company’s responsibility and sustainability functions for more than 12 years, most recently as its vice president and head of CR and philanthropy.
Sabo said the bond would “drive inclusive economic growth”, forming part of Visa’s mission to “ensure that people and planet can both thrive together”.
The name’s Bond. Green bond.
Global green bond issuance last year reached an all-time high in terms of both individual bonds issued and collective value issued. According to LinkLaters, $185.6bn (£141.7bn) of green bonds were issued in 2019, compared to $142.4 (£108.8) in 2018. Major corporate green bonds launched in 2019 came from the likes of Apple and PepsiCo.
The pandemic seems to have placed a renewed focus on ESG or impact investing – particularly the ‘social’ aspect. JP Morgan recently polled investors from 50 global institutions, representing a total of $12.9 trillion in assets under management on how they expect Covid-19 to impact the future of ESG investing. 71% said it was likely to accelerate action.
In recent weeks, green or sustainability bonds have been launched by West Berkshire Council – with more UK local authorities set to follow suit – and Google’s parent firm Alphabet Inc. Alphabet claims that its $5.75bn sustainability bond package is the largest launched by a corporation to date.
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