This case study was published in the 2022 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 32 case studies showcasing REIT leadership and ESG innovation from a variety of sectors. The report serves as a practical tool for shareholders and stakeholders to assess the scale and impact of the REIT industry's ESG commitments and initiatives. Applicable footnotes and/or citations for this case study are available in the full report.
Pursuing Green Bonds to Fund Business Growth with Sustainable Projects
Digital Realty Trust, Inc., a leading issuer of green bonds in the data center industry, actively evaluates the viability of green bonds to cost-effectively fund the growth of its business through sustainable projects.
In 2015, Digital Realty, was the first company to issue a green bond in the data center sector. Since then, the company has issued a cumulative $6.0 billion in green bonds, $4.3 billion of which were issued in 2020 and early 2021. As a result, the company is able to support a wide range of sustainability projects, such as the development of green buildings, renewable energy implementation, and energy efficiency projects.
In addition to funding environmentally-sound initiatives, green bonds have acted as a catalyst for enhanced tracking and monitoring of energy usage due in part to a requirement in the company’s green bond framework to generate a minimum of 15% energy savings per project.
“Sustainability has been an increasingly integral aspect of not only building and operating the business but also financing the business. Therefore, it continues to be essential that the finance and sustainability teams continue to work closely together in a collaborative manner.”
-Mike Brown, Senior Vice President, Treasury, Digital Realty Trust, Inc.
Through the issued bonds and subsequent green building and energy developments, Digital Realty has:
- avoided 1.7 million MTCO2e of greenhouse gas emissions, equivalent to the annual emissions from approximately 370,000 passenger vehicles
- produced 1.3 million MWh of renewable energy, enough to power over 110,000 homes for one year
- saved 22,000 kGal of water, enough to fill over 33 Olympic-sized swimming pools; and
- supported the creation of 10,000 jobs.
The green bond process has also helped to drive cross-functional collaboration and increased engagement of Digital Realty team members across its finance, design and construction, energy operations, and sustainability departments.
In the future, Digital Realty foresees a shift toward sustainability-linked bonds, moving away from the dollar-for-dollar format of green bonds, and allowing for fundraising aligned to the performance of a variety of environmental, social, and governance targets.
Digital Realty Trust, Inc. supports the world’s leading enterprises and service providers by delivering the full spectrum of data center, colocation, and interconnection solutions. The company’s global data center footprint gives customers access to the connected communities that matter to them with more than 290 facilities in 49 metros across 24 countries on six continents.