Episode 12 - Sustainability-linked financing and data centers, with Aligned’s Matthew Chambliss
Jul 21, 2022
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Matthew Chambliss, VP of Finance at Aligned, talks about sustainability-linked financing in data centers. Topics include Green Bonds, Sustainability-Linked Loans, Aligned's $3b sustainable debt, and the importance of sustainability metrics. The podcast explores eco-friendly practices, financial aspects of green bonds, Aligned's commitment to sustainable operations, and the rising trend of sustainable financing in data centers.
Data center owners tie financing to ESG goals like PUE and water use for sustainability-linked financing.
Green bonds fund specific green projects, while sustainability-linked loans offer flexible ESG goal usage.
Deep dives
The Importance of Sustainable Financing in Data Centers
In today's episode, the discussion revolves around sustainable financing in data centers, emphasizing the shift towards sustainability in the industry. Matt Shambliss, VP of Finance at Aligned, delves into the differences between green bonds and sustainability link loans, highlighting how they serve similar purposes but with distinct structures. He sheds light on how green bonds are project-based, focusing on specific data center projects, while sustainability link loans offer more flexibility in fund usage tied to ESG goals.
Aligned's Commitment to Sustainability-Linked Financing
Aligned, as a company, solidifies its commitment to sustainability by opting for 100% sustainability financing through sustainability-linked loans and green bonds. Matt mentions their extensive green financing of $3.1 billion, attributing their early adoption and dedication to sustainability as integral to their financing approach. The core ethos of sustainability embedded in their operations aligns with their financial decisions, emphasizing the alignment of business values with financial strategies.
Driving ESG Goals Through Financing in Data Centers
The podcast underscores the essential role of ESG-based financing in propelling environmental, social, and governance (ESG) objectives in the data center sector. Matt delves into how setting specific sustainability targets, such as PUE levels and water usage efficiency, plays a crucial role in achieving sustainable financing. He highlights the importance of customer demand driving sustainability efforts and the alignment of financial decisions with long-term sustainability goals.
Challenges and Opportunities in Sustainable Financing
The conversation extends to explore the challenges and benefits associated with sustainable financing, delving into the potential cost implications and advantages of integrating sustainability measures into financial strategies. Matt emphasizes the evolving landscape of sustainable financing, where transparency, stakeholder collaboration, and alignment with industry standards are paramount in navigating the complexities of ESG-driven financial frameworks.
As sustainability continues to become an increasingly important issue for data center owners and operators, many are tying their financing into ESG-related goals. The likes of Green Bonds see proceeds going towards specific green projects, while Sustainability-Linked Loans see interest payments tied to specific targets such as PUE or water use.
Such financing options have been adopted by cloud and data center companies including Equinix, Digital Realty, Atos, Baidu, AirTrunk, and telcos such as Telefonica, NTT, and Verizon.
US operator Aligned’s whole debt pile – more than $3billion – is entirely made up of sustainable-tied financing. Aligned’s VP of Finance, Matthew Chambliss discusses the company’s reasoning and journey to adopting sustainable financing.
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