Verizon issued its fifth green bond for $1 billion in recognition of the fact that the carrier cannot rely upon on-site renewable energy to address the full environmental impact of powering its core products: 5G, 4G LTE and fiber backbone networks. "We have to run them as efficiently as possible. Ergo, energy is our opportunity," Verizon Chief Sustainability Officer (CSO) and SVP of Global Supply Chain Jim Gowen told SDxCentral.

Verizon currently boasts more than 27 megawatts (MW) of on-site solar power, but Gowen noted the operator will "never get on-site to the scale [we] need" because of its site locations. "It's unfortunate, but we can't," he said. Telecom operators require 24/7 access to electricity over large land areas, which means it’s challenging to directly use renewable energy sources as a primary source of electricity. Instead, many telecom operators – including Verizon – plug into local power grids that may provide a mix of renewable and fossil fuel-based electricity.

To pick up the slack left after on-site renewable energy options are exhausted, Verizon also focuses on being a positive influence through virtual power purchase agreements (VVPAs), which allow the telco to fund the generation of renewable grid energy by providing capital to local power authorities that adopt solar or wind energy facilities. Gowen noted the company's previous green bond offerings provide more than three gigawatts (GW) of clean energy to power grids where Verizon operates.

Green bonds are a way for enterprises to earmark funds for projects that positively impact the environment. Verizon issued its first green bond for $1 billion in 2019, and those funds were fully allocated in 2020 for renewable energy, green buildings, biodiversity and conservation efforts. Since then, the carrier has issued four additional green bonds in an effort to cope with its plans of continued network expansion and the increased power consumption that will follow closely behind.

To that point, Gowen explained Verizon's green bond strategy is designed to help the operator put its money where its mouth is. "Yes, we are a big company. Yes, we are a for-profit company. And yes, we're going to go forward and build the grid out to make it greener," he said.

Despite the ample business benefits of operating more sustainably, "I am always going to lose the business case versus growing our network," Gowen noted. But by issuing a green bond and determining the use of those proceeds in advance, "I no longer have to fight the business case," he said. "The network people are going to get their money, but this money is locked and loaded just for the things we're working on. That's a big difference."

A holistic approach to grid decarbonization

Despite its global impacts, climate change and the fossil fuel industry's role in accelerating the climate crisis remain heavily politicized topics. Gowen maintained his company's formal political neutrality, but he noted Verizon supports and plans to oblige with any federal, state or regulatory rules around climate change mitigation. "Where our passion lies is anything that can be done to facilitate that," he noted.

Verizon's sustainability conversations with organizations like the FCC and lawmakers at the federal or state level aim to be holistically focused, Gowen noted. That means these conversations don't sound like, "how does big Verizon win this area?" Instead, "it's got to be [about] what is in it for the local" communities, ecosystems and supply chains when renewable energy is introduced to the grid.

And because Verizon itself is a service provider, it carries a unique responsibility to avoid "the bad supply chain actors in the world," Gowen added. "We build networks. We rely on our supply chain to bring us goods and services, and they're manufactured, for the most part, not in the United States. So we have to do a really good job working with the Department of Defense [and] with Homeland Security to make sure nothing goes into our network that we don't want," he explained.

Why executive leadership and boardroom buy-in matters

While the sustainability leader stressed the significance of Verizon's fifth green bond and green financing efforts, "it's so much more than that. And it takes the passion of leadership," including from the board of directors. Gowen also mentioned Verizon's Environmental Council on Change, where he sits with Verizon's CFO and other executives. "And all we talk about is: how do we push the envelope? And we do it responsibly, but we do it the right way," he said.

To that point, he touted the strength of Verizon's environmental, social and governance (ESG) initiatives. "We've been consistent. We've made commitments. We've been transparent about them. We audited with our third parties. We put them in our annual ESG report. We continue to facilitate incremental growth to the greening the grid, but it just doesn't stop there," Gowen said.

"We make commitments, and we're living up to them. We're not backing off," he promised.