Visa has priced its inaugural green bond offering, totaling $500 million, paying a semi-annual coupon of 0.75% and maturing August 15, 2027. The green bond, believed to be the first issued by a digital payments network, will be used to help advance the company’s commitment to environmental sustainability and a sustainable payments ecosystem. In support of that commitment and in addition to its inaugural green bond, Visa is also announcing the appointment of its first chief sustainability officer, Douglas Sabo.
As outlined in the Visa Green Bond Framework, the proceeds of the green bond will be used to fund projects including upgrades to buildings, energy efficiency improvements, expanded usage of renewable energy sources, water efficiency projects, employee commuter programs, and research and initiatives focused on sustainable consumer behaviors. The proceeds will also support investments in projects to inspire and foster sustainable living in support of the United Nations Sustainable Development Goals.
Visa will issue an annual report on the use of proceeds from the green bond and their environmental impact. Sustainalytics, a provider of ESG research, ratings and data, provided the second-party opinion on the environmental benefits of Visa’s Green Bond Framework as well as its alignment with the Green Bond Principles.
Google’s parent company Alphabet recently made headlines for issuing $5.75 billion in sustainability bonds, the largest sustainability or green bond by any company in history. Although a number of companies have issued green bonds (directed solely to environmental uses), sustainability bonds differ in that their proceeds support investment in both environmental and social initiatives. Such bonds are an emerging asset class and Google is hoping this transaction will help develop this new market. According to Alphabet, there was strong demand for these bonds from investors — they were significantly oversubscribed.
The proceeds from Google’s sustainability bonds will fund ongoing and new projects that are environmentally or socially responsible and enable investors to join the company in tackling critical issues. We believe that these investments benefit our communities, employees and stakeholders, and are an important part of fulfilling Google’s mission and goal of creating value over the long term.