When the big companies say they are going green they very rarely have to dip into there own pockets. They use other peoples money.
I do not have an issue with this. It its one way of raising investment to get solar and wind farms built without having to rely on the government. However it would be better if such mechanisms could be used for individuals or smaller entities, perhaps a bond issue creating a pooled fund.
Apple has issued $1.5 billion in bonds that will finance sustainable business projects. This is the largest ever “green bond” issued by a U.S. corporation. The bond—rated Aa1 by bond rating agency Moodys—pays 2.85 percent over seven years, Sustainable Business noted. The bond is part of an overall package of $10-$12 billion worth of new bonds Apple is selling.
Apple is specifically raising money from investors to spend on environmentally friendly projects. , Apple will pay investors back with interest. This is where the funds will go, according to the bond’s prospectus:
- New and ongoing renewable energy projects, such as solar and wind projects, or associated energy storage solutions
- Green building expenditures such as certification of LEED Gold or Platinum or BREEAM Very Good, Excellent, or Outstanding standards
- The implementation of environmental design elements for new or ongoing building developments, such as high performance mechanical systems, natural ventilation, on-site renewable energy and high performance lighting systems
- Energy efficiency projects and technologies at Apple’s corporate facilities, such as heating, ventilation and air conditioning systems upgrades, lighting retrofits and energy monitors and controls
- Water efficiency projects and technologies at our corporate facilities, such as upgrades to water efficient fixtures and water efficient irrigation and increased use of recycled water
- Projects that enhance recycling, material recovery and reuse, and landfill waste diversion for our products and facilities
- Projects and technologies that facilitate the use of greener materials in our products
Many other corporations also issue green bonds to finance their renewable energy projects as can be seen from the following graph
This a win win for them as they can become “green enterprises” without having to find the funds themselves or dip into the cash reserves. More importantly to the share holders they do not have to dip into potential dividends.
Although the global green bond market is still taking baby steps in the financial world, the market is “growing rapidly,” KPMG pointed out. that November 2015 “was the strongest month on record for global green-bond issuance, with $7.39 billion in new bonds.”
The government no longer needs to sponsor alternative energy projects, but it does need to have sensible legislation. Now alternative energy is a main stream financial instrument it will gather momentum as investors look for long term sustainable investments which mining and fossil fuel companies cannot provide at the moment.
These are low risk long term projects that will eventually filter down to smaller corporations.
To date no bond have been issued for any free energy projects. When a free energy technology becomes available the financial markets will evaluate its economic viability in comparison with renewables.