Utility Develops Sustainable Framework for Net Zero Future
This week, Southern Company, an energy company serving nine million customers throughout the country, announced that it has developed a sustainable financing framework that will allow the company and its subsidiaries to issue bond investments for eligible sustainable projects.
Southern Company is among one of the first U.S utilities to set industry-leading goals to reduce greenhouse gas emissions and has set a goal of net zero emissions by 2050.
The Southern Company Sustainable Financing Framework details the eligibility criteria for green projects such as:
- renewable energy
- energy efficiency
- access to essential services (I.e. education and telecommunications)
- employment advancement and development opportunities
In addition to the green projects, the framework also includes criteria for social projects that align with the company’s social initiatives. Among the social projects eligible for investment include:
- procurement of products and services from diverse suppliers
- education assistance for minority populations
- economic advancement and development opportunities for underserved employees, communities and students
According to the framework, Southern Company and its subsidiaries issue investments to projects that are in line with a variety of voluntary process guidelines as well as with the United Nation’s 17 Sustainability Goals that are part of the UN’s 2030 Agenda for Sustainable Development.
When asked for more information about how the framework was created, Southern Company released a statement to The Well News stating, “Southern Company worked closely with the ESG teams at JP Morgan and Bank of America, who served as structuring agents for the company’s Sustainable Financing Framework.
“Additionally, a second party opinion provider reviewed the framework and provided an opinion on the environmental and social benefits of the framework as well as its alignment with the Sustainability Bond Guidelines 2018, Green Loan Principles 2020, Green Bond Principles 2018 and the Social Bond Principles 2020.
“As stated in the framework, our rationale for issuance under the framework is because Southern Company has been an early supporter and thought leader in the Green Bond market.
“’Through the creation of a Sustainable Financing Framework out of which we and our subsidiaries may issue Green Bonds, Social Bonds, Sustainability Bonds, loans or other financial instruments (collectively the ‘Sustainable Financing Instruments’) we aim to contribute to the transition to a sustainable economy.
“We hope our issuance will inspire other similar companies to do the same,” concluded the statement.
As of January 8, 2021, Southern Company has awarded its inaugural bond under the framework to Southern Power Company, one of the subsidiaries under Southern Company. The inaugural bond totals $400 million in the form of a green bond.
The $400 million green bond issuance is not the first green bond issued by Southern Company. Since 2015, Southern Company and its subsidiaries have issued seven series of green bonds totaling nearly $3.5 billion, not including the latest $400 million green bond.
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