The ICMA Green Bond Principles 2021 and the LMA, LPMA and LSTA Green Loan Principles 2021 (together, the “Principles”) are voluntary guidelines for the issuance of green debt.
Verizon is extending its sustainability commitment under the Framework to cover the selection of underwriters for Green Financing instruments. A financial institution will be eligible for selection as an underwriter only if it meets at least one of the following criteria: (i) it has established clear and impactful commitments in support of the U.N. Sustainable Development Goals1 ; and/or (ii) it is a diverse-owned firm and/or has a core mission of promoting Diversity, Equity and Inclusion.
1 We will evaluate this periodically and will consider commitments such as targets towards achieving net zero carbon emissions in operations and financing before 2050, and 100% renewable energy usage.
Verizon’s Green Financing Framework is designed to be aligned with the Principles via the following key pillars:
For each Green Financing under this Framework, we intend to allocate an amount equal to the net proceeds of the Green Financing to the financing or refinancing, in whole or in part, of Eligible Green Investments. “Eligible Green Investments” include new and existing investments made by Verizon during the period from two years prior to the Green Financing through its maturity that meet the eligibility criteria.
SDG alignment
Eligibility criteria and example projects
1) The development, construction or operation of facilities, equipment or systems that generate or transmit renewable energy, such as: a. solar energy; and b. wind energy;
2) The purchase of renewable energy pursuant to long-term power purchase agreements or virtual power purchase agreements entered into prior to the commencement, or in the case of rehabilitated projects, the re-commencement, of commercial operation of the renewable project, that meet our “additionality” objective of bringing new renewable energy sources to the grids that power our networks such as: a. solar energy; and b. wind energy;
The design, manufacture or installation of systems, products and technology that are designed to reduce energy consumption or mitigate greenhouse gas emissions in our operations consistent with meeting Verizon’s publicly stated goals for energy efficiency, such as: 1) deployment of 5G wireless technologies that allow for real-time response to energy demand, including: a. smart city systems; b. smart building management systems c. telecommuting systems; and d. smart grids;
2) legacy network technology replacements or upgrades; 3) replacement of old equipment with energy efficient equipment, such as heating, ventilation and cooling (“HVAC”) systems, real estate chillers, cooling towers, and lighting; and 4) upgrades to Verizon buildings that are designed to improve the buildings’ ENERGY STAR2 scores and to have expected energy efficiency increases of at least 30%
2 ENERGY STAR is a voluntary U.S. Environmental Protection Agency program that seeks to deliver environmental benefits and financial value through superior energy efficiency. To be eligible for ENERGY STAR certification, a building must earn an ENERGY STAR score of 75 or higher, indicating that it performs better than at least 75 percent of similar buildings nationwide.
1) Investments in new building projects and in existing building retrofits that upgrade the buildings’ facilities and equipment so that either: a. the building was able to receive during the two-year period prior to the issuance of the notes, or will be able to receive during the three-year period after the issuance of the notes, a third-party verified green building certification, such as:
i. LEED3 Gold or higher; or ii. an ENERGY STAR rating of 85 or higher; or iii. other equivalent third-party verified green building certification; or b. the building is carbon net-zero; or
2) leasing, on a capitalized basis, new or existing buildings that have received one of the above third-party verified green building certifications;
3 Leadership in Energy and Environmental Design (“LEED”) is a voluntary, third-party building certification process developed by the U.S. Green Building Council (“USGBC”), a non-profit organization. The USGBC developed the LEED certification process to (i) evaluate the environmental performance from a whole-building perspective over a building’s life cycle, (ii) provide a definitive standard for what constitutes a “green building,” (iii) enhance environmental awareness among architects and building contractors, and (iv) encourage the design and construction of energy-efficient, water-conserving buildings that use sustainable or green resources and materials.
Investments in corporate facilities, products or the supply chain designed to improve water efficiency, water conservation or water quality consistent with meeting Verizon’s publicly stated goals for water management, such as:
1) the installation or upgrade of: a. water efficient fixtures that create water savings; b. water efficient irrigation systems; or c. systems designed to increase use of recycled water; and 2) upgrades to cooling towers and other HVAC equipment;
Reforestation and ecological restoration of land to preserve biodiversity and native ecosystems
The offering documentation for each Green Financing will specify the categories of Eligible Green Investment to which the net proceeds of such Green Financing may be allocated.
Verizon’s Sustainability and Treasury teams will be responsible for determining whether projects fit within one or more categories of Eligible Green Investments set forth above and align with this Framework. To evaluate eligible projects under the Framework, the Sustainability and Treasury teams will adhere to Verizon’s existing corporate policies and procedures when assessing perceived social and/or environmental risks associated with the projects.
We intend to allocate an amount equal to the net proceeds from a Green Financing to the financing or refinancing of existing and future Eligible Green Investments. Such allocation will be reflected in Verizon’s internal records. Any portion of the net proceeds of a Green Financing that has not been allocated to Eligible Green Investments will be managed in accordance with Verizon’s normal liquidity management practices. We intend to allocate a majority of the net proceeds of a Green Financing to finance or refinance Eligible Green Investments within three years from the date of issuance of the applicable Green Financing Instrument. In the case of divestment or if a project is not completed or no longer meets the eligibility criteria listed above, we intend to reallocate the funds to other Eligible Green Investments.
Payment of principal of and interest on the debt issued in a Green Financing will be made from Verizon’s general funds and will not be linked to the performance of any Eligible Green Investments.
Within one year from the date of issuance of the applicable Green Financing Instrument in a Green Financing, and annually thereafter until we have reported that an amount equal to the net proceeds of the financing has been allocated to Eligible Green Investments, we intend to publish, and keep readily available, on a designated website, a Green Financing Report setting forth information with respect to (i) the allocation of such amount and (ii) the amount of net proceeds pending allocation. The report is expected to include an assertion by Verizon’s management team as to the aggregate amount allocated to specific categories of Eligible Green Investments and will describe such Eligible Green Investments.
For categories of Eligible Green Investments that receive a material allocation of proceeds from a Green Financing under this Framework, Verizon will report anticipated environmental impacts where feasible (on an annual basis when relevant). Potential environmental impact metrics may include, but are not limited to, the following:
Renewable Energy
Energy Efficiency4
Green Buildings
Sustainable Water Management
Biodiversity and Conservation
4 Environmental impact metrics for energy efficiency projects related to the deployment of 5G wireless technologies remain under development. Additional information will be provided in the offering documentation for any Green Financing for which we intend to allocate proceeds to such projects.
