Google Parent Alphabet Issues US$5.75B In Sustainability Bonds

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Google’s parent company Alphabet Inc. has just issued US$5.75 billion in sustainability bonds, in what it claims is the biggest green bond issued by any firm to date. The proceeds will support investments in both environmental and social initiatives and will not be allocated to any of Google’s activities. 

As a part of a US$10 billion debt offering, Alphabet has issued US$5.75 billion in sustainability bonds, the proceeds of which will be used to fund ongoing and new projects that are environmentally or socially responsible.

The firm said that the bonds were strongly oversubscribed, an indication of the strong demand from investors. According to Reuters, there was US$31 billion in demand for the bond sale. 

“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,” wrote Ruth Porat, the chief financial officer of Google and Alphabet, in an announcement. 

The proceeds from the bonds will go towards eight specific areas, according to the firm. These include investments in energy-efficient technologies, carbon-free clean energy solutions, green buildings, emissions-free transportation, innovation in circular economy, building affordable housing, racial equity through supporting Black-led businesses, and financing small firms and organisations on the frontlines of the coronavirus pandemic response

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.

Ruth Porat, Chief Financial Officer at Google and Alphabet

Alphabet says that it will provide annual reports on which projects have been funded from the bonds’ proceeds and the expected impact it will create in order to ensure transparency. 

“This is the next chapter in our commitment to a more sustainable future for everyone,” said Porat. 

The tech titan’s bond sale comes amid a wave of similar ESG-focused offerings in recent weeks, amounting to a 376% jump in the first half of 2020 compared to the same period last year, as reported by a BloombergNEF report. 

Across the board, from the financial industry to large firms across different sectors, climate risks and social inequalities are increasingly being priced in as the coronavirus, no doubt stemming from the wake-up call presented by the coronavirus pandemic. 

Last week, BNP Paribas announced the successful issuance of a series of 8-year green bonds in Australia, marking the first to be linked to the Australian Climate Transition (ACT) Index. Potential returns will be used to invest in a portfolio of certified green projects, according to the French bank. 


Lead image courtesy of Shutterstock.


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