With its recent $1 billion bond issuance, Verizon has joined the growing ranks of companies issuing "green bonds", debt instruments whose proceeds must be used for sustainability projects. Projections from McKinsey and others suggest this market will reach $200 billion this year.
Jim Gowen, vice president for Verizon’s global supply chain and chief sustainability officer, has been a long-time member of Smeal's Sustainability Advisory Board (check out all the outstanding people on our board here).
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The size of the US bond market is well over $40 trillion so even if green bonds reach $250 billion this year, it's a proverbial drop in the bucket. From a macro economic perspective. But if the dollars fund actual renewable energy projects thus further enhancing the efficiency and profitability of those markets, green bonds are only just beginning. And they seem to have real benefits. According to Caroline Flammer's research in a November 2018 report in the Harvard Business Review (HBR):
"In a recent analysis of the 217 corporate green bonds issued by public companies globally from January 1, 2013 to December 31, 2017, I show that they yield a positive stock market reaction, improvements in financial and environmental performance, an increase in green innovations, and an increase in stock ownership by long-term and green investors."