Digital Realty green financing shows how data center operators use money to push sustainability. The company was the first data center real estate investment trust to issue a green bond, and it later tied a large credit line to its sustainability performance.
Digital Realty green financing: the green bond
In June 2015 the company raised 493 million dollars for nine certified projects, five in the United States, two in Australia and one each in the United Kingdom and Ireland. It describes itself as the first data center REIT to issue a green bond. This is a financing story about the sector and not investing advice.
The sustainability linked credit line
On 22 November 2021 Digital Realty upsized its global revolver from 2.35 billion to 3.0 billion dollars and added pricing that depends on annual sustainability targets, with a maturity of January 2027. A companion yen facility of 33.3 billion yen, about 290 million dollars, was also extended. More than 25 institutions committed. Neither source disclosed the exact metrics that adjust the pricing.
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Targets and wind power
The company’s 2020 ESG report targets a 68 percent cut in Scope 1 and 2 emissions and a 24 percent cut in Scope 3 by 2030, from a 2018 baseline. In 2016 it agreed to buy about 400,000 megawatt hours a year of wind power through E.ON’s US arm, covering 112 US data centers, with about 275,000 metric tons of carbon reduced each year. The sites are not necessarily powered directly by the wind farms, so this works as an offset.
Why it matters
When lenders tie the cost of money to climate targets, boards pay attention. The sources here date from 2015 to 2021, so readers should look for current figures. The structure is a model other infrastructure firms have followed.
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Submit your companySources: Digital Realty green bond page; DCD, July 2016; SFNet, November 22, 2021. Figures marked as company reported come from the company itself.
