Apple has issued $1.5 billion in bonds dedicated to financing clean energy projects across its global business operations, the largest green bond to be issued by a U.S. corporation, the company’s head of environmental policy said Wednesday.
The Cupertino, California-based tech giant (AAPL) said proceeds from the green bond sales will be used to finance renewable energy, energy storage and energy efficiency projects, green buildings, and resource conservation efforts.
“This will allow investors to show they will put their money where their hearts and concerns are,” Lisa Jackson, Apple’s vice president of environment, policy and social initiatives, told Reuters.
Although green bonds comprise a small fraction of the overall bond market, demand is expected to grow as investors seek lower-carbon investments.
Moody’s Investor Services said earlier this month it expects to see the issuance of green bonds rise to over $50 billion this year, following a record $42.4 billion issuance in 2015 due to the global climate change agreement reached in Paris in December.
Jackson said the Paris agreement prompted Apple to launch the green bond since hundreds of companies pledged to green their investments at the U.N. climate summit.
Some investors have said the green bond market has been hamstrung by a lack of commonly agreed standards on what constitutes a green bond and transparency about how proceeds from sales are used.
The definition of a green bond varies greatly. Socially conscious mutual funds, insurers and other likely buyers use different voluntary guidelines for investing in green bonds.
Apple will use the Green Bond Principles established by a group of financial institutions including BlackRock and JPMorgan Chase.
Consultancy Sustainalytics has reviewed Apple’s green bond framework to make sure it meets those standards. Accountancy Ernst and Young will do an annual audit of how the green bond proceeds are used.
Apple is expected to spend the majority of proceeds within two years of the issuance of the bonds.
Apple has taken steps to reduce its carbon footprint in its home state of California and at facilities across the globe and is pushing its suppliers to switch to renewable energy.
In October, the company announced steps to green its operations in China by bringing on over 200 megawatts of renewable energy and working with its suppliers, including Foxconn, to switch to cleaner energy sources.