Green Bond Allocation Statement 2025 - Digital Realty

Transcription

GREEN BOND ALLOCATION STATEMENTDigital Dutch Finco B.V. 0.625% Guaranteed Notes due 2025JANUARY 15, 2021Digital Realty the trusted foundation powering your digital ambitions

Table of ContentsEnvironmental, Social and Governance (ESG) at Digital Realty3Green Bond Impacts4Independent Accountant’s Report5Appendix A: Management’s Assertion Regarding Eligible Green Project Criteria6Appendix B: Green Bond Allocation Statement7Appendix C: Green Building Projects8-11Appendix D: Energy Efficiency Projects12Appendix E: Eligible Period Definitions & Green Building Standards13Appendix F: Data Tables14DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 2

Environmental, Social and Governance (ESG) at Digital RealtyAdditional Information Provided by ManagementDigital Realty is proud to play a leading role in helping tofoster a more sustainable digital future. We continue toincorporate sustainability into our business functions toensure we are meeting our customers’ needs, capturingsavings and generating revenue from activities thatreduce our impact on the environment.In 2019 and 2020 we added 330 megawatts (MW) of newrenewable energy contracts throughout our US portfolioand continued our 100% renewable energy procurementin EMEA and for our US colocation business. Our Designand Construction teams delivered nine sustainablycertified new data centers spanning 3 million square feet,bringing our cumulative total to 72 certifications.Our global Operations teams implemented more than 60performance-enhancing retrofits over the past threeyears. In 2020, 70% of our managed and stabilized U.S.operating portfolio received Energy Star certification.Execution at this scale reflects our efforts to integratesustainable objectives throughout our business.For the fourth consecutive year, Digital Realty receivedthe Nareit Data Center Sector Leader award for ESGpractices in 2020.We remain focused on ensuring that weare a leader in environmental, social andgovernance issues and are maintaining ourfocus on energy efficient data centerdesign and operations and partnering withour customers to deliver innovative datacenter solutions.Our sustainability expertise is enhanced by our longstanding track record of reliability and resiliency, havingdelivered “five nines” of uptime for more than a decade.In addition to addressing uptime through operationalexcellence, we plan proactively for risks due to extremeweather events, flooding and resource scarcity that havethe potential to impact data center availability.We’re excited to have finalized ourScience-Based Target, taking a holisticapproach to reducing emissions across ourbusiness.We remain committed to attracting and retaining the bestand brightest talent and ensuring that our people feelsafe, secure and inspired. Our women empowermentprograms, philanthropy, corporate health and wellnessprograms, and employee engagement supported athriving environment for our employees.We remain committed and ready to meetour customers’ needs reliably andsustainably as part of our platform forcontinued growth and strong financialperformance.Additional material about our ESG initiatives can befound in our GRI-aligned and 3rd-party assured ESGreport: and-governance-report-2019-highlightsA. William SteinChief Executive OfficerDIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 3

Green Bond ImpactsAdditional Information Provided by ManagementThis report includes allocation of the net proceeds of thegreen bonds issued by Digital Dutch Finco B.V., anindirect wholly-owned subsidiary of Digital Realty Trust,L.P., in January 2020. It provides insight into oursustainability program initiatives and project performance,economic, and social impacts. We believe ourcommitment to sustainability and our use of green bondswill encourage others in our industry to advance their ownenvironmental commitments.In 2020 Digital Realty issued Euro-denominated greenbonds, aligned with Digital Realty’s Green BondFramework, which received a second-party opinion fromSustainalytics. This follows Digital Realty’s prior greenbonds issued in 2015 and 2019.Digital Realty’s green bond demonstrates alignment withU.N. Sustainable Development Goals and our owncorporate materiality assessment. Our allocation of netproceeds addresses key aspects of the data centerlifecycle – new construction, renewable energy, andimprovements to operational efficiency – with a focus onmanaging and reducing environmental impacts each stepof the way.The projects identified in this Allocation Statement delivermeaningful environmental benefits alongside local andregional economic benefits by supporting jobs and byincreasing the local tax base.Digital Realty seeks to lead the globaldata center industry in sustainableenvironmental performance. We arecommitted to ongoing efforts thatbenefit the environment and meet theneeds of our customers while alsostrengthening our business.Our principal sustainability objectivesinclude: Providing data center solutions thatdeliver industry-leading energyproductivity and resource efficiency,increase client value and lower cost ofownership Empowering employees and clients toimprove resource efficiency in areassuch as energy, water, waste andcarbon emissions Communicating our performanceregularly and transparently tostakeholdersCUMULATIVE IMPACTS DURING ELIGIBLE PERIOD(1)9eligible projectsincluded inallocation ofproceeds1.1.04million187,62091millionmetric tonsCO2e avoidedmegawatt-hoursrenewable energygallons of watersaved1,42893%59%terawatt-hoursenergy savedof waste divertedfrom landfillspotable watersavings vs.baseline5,605construction jobs518permanent jobsSee Appendix B for additional detail on impacts during the eligible period.DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 4

Independent Accountant’s ReportDIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 5

Appendix AManagement’s Assertion Regarding Eligible Green Project CriteriaDigital Realty’s management is responsible for thecompleteness, accuracy and validity of this Green BondAllocation Statement.Management asserts that the net proceeds of the offering ofthe notes included in the Green Bond Allocation Statementwere used to fund, in whole or in part, recently completed orfuture Eligible Green Projects (as defined below), includingthe development and redevelopment of such projects.Energy and Resource EfficiencyInvestment in energy and resource efficiency of buildings,building subsystems, or land, which: Improve energy efficiency by at least 15%, or Increase water use efficiency by at least 15% Support the use of non-potable or reclaimed water“Eligible Green Projects” means projects as defined in thefollowing categories:Renewable EnergyGreen BuildingsInvestment in renewable energy, including:Construction, refurbishment, renovation of, or tenantimprovements to green buildings certified under a verifiedthird-party standard, at the following certification levels: On-site renewable energy systems, such as solarphotovoltaic generation Expenditures on renewable energy power purchaseagreements (PPAs)Energy storage systemsi.LEED: Silver, Gold or Platinum;ii.BREEAM: Very Good, Excellent or Outstanding; iii.BCA Green Mark: Gold, GoldPlus or Platinum;iv.Green Globes: 3 Globes or 4 Globes;v.CEEDA: Silver or Gold;Eligible Green Projects are expected to be located incountries where we operate or plan to operate. Thesecountries include, but are not limited to: the United States,Canada, the United Kingdom, Ireland, France, theNetherlands, Germany, Australia, Singapore, Hong Kong, andJapan.vi.CASBEE: B , A or S; andvii.DGNB: silver, Gold, or Platinum.DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 6

Appendix BGreen Bond Allocation Statement as of December 31, 2020(1)NET PROCEEDS FROM ISSUANCE OF NOTES 645,755,500(2)Digital Dutch Finco B.V. 0.625% Guaranteed Notes due 2025CATEGORYCERTIFICATIONRATINGLOCATIONConnect Way, Manor Royal (Crawley Unit 2)(4)London, England, U.K. 30,441,46711 Loyang CloseSingapore 81,147,001LEED Gold21744 Sir Timothy DriveAshburn, Virginia, U.S. 189,676,693LEED Silver44751 Round Table PlazaAshburn, Virginia, U.S. 342,483,228Various Efficiency UpgradesMultiple locations, U.K., U.S.BREEAM ExcellentGreen BuildingsEnergyEfficiencyBCA Green MarkExcellentn/aNet Proceeds1.2.3.4.ALLOCATION OF NET PROCEEDSTO 0.625% GUARANTEED NOTESDUE 2025 (3)PROJECT NAMESee Appendix A for eligible period definitions.Net proceeds from issuance of 0.625% Guaranteed Notes due 2025 on January 17, 2020, by Digital Dutch Finco B.V.Exchange rate on January 17, 2020 (1.10898:1).A portion of this project’s total investment has been allocated to the Digital Dutch Finco B.V. 0.625% Guaranteed Notes due 2025 anda portion has been allocated to the Digital Dutch Finco B.V. 1.500% Guaranteed Notes due 2030. A portion remains unallocated. 2,007,111 645,755,500DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 7

Appendix C: Green Building ProjectsConnect Way, Manor Royal (Crawley Unit 2), London, EnglandAdditional Information Provided by ManagementBREEAM PerformanceFor BREEAM Data Centers 20101.18100% RenewableEnergyDesign PUECertification awarded December2019Excellent4.212.0Acres woodland preservedadjacent to siteMW data centerCrawley Unit 2 is a 12 MW, 109,000 square foot data centerthat is part of Digital Realty’s Crawley data center campus.Located near Gatwick Airport south of London, this projectdemonstrates leading sustainable design and energyperformance.70.2%Management75%Health and 33%Waste71%Land use and ecology40%Pollution45%Innovation40%The data center is powered by carbon-free renewableenergy and uses an indirect air cooling system for the datahalls. These units "free cool" for much of the year,supported by a highly efficient evaporative cooling systemthat runs during high ambient conditions and refrigerantbased top-up for infrequent extreme summer periods. Thissolution delivers an annualized design PUE(2) of 1.18.The project re-developed a former industrial property.Digital Realty also manages a 4.2-acre (1.7-ha) woodlandadjacent to the site as a public amenity space. The projectutilized a contractor certified under the ConsiderateContractor framework(3), a construction industry initiative toencourage best practices that support the general public,the workforce and the environment.1.2.3.Total emission reductions for the eligible period. See Appendix A for definition of eligible period.PUE: Power Usage Effectiveness, a measure of data center operational efficiency. etric v6.pdfhttps://www.ccscheme.org.uk/DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 8

Appendix C: Green Building Projects11 Loyang Close, Jurong, SingaporeAdditional Information Provided by ManagementBCA Green Mark PerformanceGreen Mark for New Data Centre V2019/V213%Energy46%Savings(1)Water SavingsCertification awarded March 2020Platinum70.8Energy Efficiency43.8Water EfficiencySustainable Construction & Management 1.29Design PUE40.5 MW-IT5-Story Urban Data Center7.014.5Smart and Healthy Building4.0Advanced Green Effort1.5This newly-constructed data center is one of the first to beawarded BCA Green Mark for New Data Centre V2019/V2,Platinum certification. The facility has a design PowerUsage Effectiveness (“PUE”) of 1.291, a notable level ofperformance in a tropical climate. This is expected totranslate to energy savings of 79,800 MWh per year once atfull operation.The data center’s design also utilizes high efficiency singlemodule UPS systems with N 1 distributed redundancy tominimize redundant equipment. The UPS system usesadvanced lithium-ion batteries that are more power dense,lighter, and have 3X the operational service life compared totraditional VRLA2 batteries.The facility uses turbine generators that operate with loweremissions than reciprocating diesel generators due to morecomplete fuel combustion and higher mechanical efficiency.The project is also planning for a green future, with a solarready roof designed for easy installation.1. Compared to a baseline design at 100% load.2. VRLA Valve Regulated Lead AcidDIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 9

Appendix C: Green Building Projects21744 Sir Timothy Drive, Ashburn, VirginiaAdditional Information Provided by ManagementLEED Performance35%16%Construction MaterialSourced RegionallyEnergy Savingsvs. BaselineFor LEED Core and Shell (v2009)Certification awarded May 2019GoldSustainable sitesWater efficiency34%Potable WaterSavingsEnergy & atmosphereENERGY STAR Certified2019, 2020619/282/1029/37Material & resource7/13Indoor environmental quality7/12Innovation6/6Regional priority credits1/421744 Sir Timothy Drive encompasses 289,000 square feeton a campus in Ashburn, Virginia. Both data centers on thecampus have received LEED certification and have gone onto earn ENERGY STAR certification. In 2020, 21744 SirTimothy Drive achieved an exemplary ENERGY STARscore of 99 out of a possible 100.The data center is a leading energy efficient data center, asevidenced by its strong ENERGY STAR score. The datacenter utilizes an energy-efficient spinning massuninterruptible power system that does not rely on batteriesto provide temporary power in the event of a power gridoutage.The facility is supplied with municipal non-potable waterwhich reduces associated potable water demand by morethan 90%. In 2019 alone, the facility avoided the use of 37million gallons of potable water.The construction of the facility supported an estimated1,648 construction jobs and 153 full-time jobs.DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 10

Appendix C: Green Building Projects44751 Round Table Plaza, Ashburn, VirginiaAdditional Information Provided by ManagementLEED Performance40%96%Potable WaterSavingsConstructionWaste DivertedFor LEED Core and Shell (v2009)Certification awarded May 2019GoldSustainable sitesWater efficiency100%Mercury-FreeLED LightingEnergy & atmosphereEV ChargingStations44751 Round Table Plaza, referred to as Building P, is a773,000 square foot, two-story LEED-Silver certified datacenter that was designed and constructed to be highlyenergy efficient and water-wise.6116/286/1017/37Material & resource6/13Indoor environmental quality8/12Innovation6/6Regional priority credits2/4The data center uses a cooling system that takesadvantage of energy-efficient free-air economization forlarge portions of the year. This system is highly modularand scalable which allows the data center to operate at highlevels of efficiency even when partially occupied. Thebuilding does not use water for cooling, an advantage in anarea experiencing high growth. The site utilizes municipalnon-potable water for landscape irrigation needs to reducedemand on potable water supplies.Lighting systems are high efficiency LED throughout thefacility, both interior and exterior. The data center useshealthy materials that support good indoor environmentalquality for building occupants, and the facility has carbondioxide sensors that monitor indoor CO2 concentrationsand adjust ventilation rates to ensure a healthy workplace.DIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 11

Appendix DEnergy Efficiency ProjectsAdditional Information Provided by ManagementData centers consume energy 24-7, and this energy isconsumed predominantly by customer IT equipment (computerservers, networking gear, and related equipment), followed byairflow and cooling systems that support reliable operation ofthe data center. Digital Realty’s operational efficiency initiativestarget cooling, airflow, and lighting systems to drive downoverall energy use, while supporting customer efforts tooptimize efficiency across their own IT equipment.Digital Realty’s Infrastructure Upgrade Energy ManagementProgram (EMP) supports energy and water conservationthrough implementation of best practices, operationalimprovements, retro-commissioning, and capital equipmentupgrades across the data center portfolio. This programsupports the identification, analysis, and implementation ofenergy-saving projects, part of an annual InfrastructureUpgrade investment program at operational data center sites.Digital Realty is a signatory to the European Union’s Code ofConduct for Energy Efficiency in Data Centers, a participant inthe U.S. Department of Energy Better Buildings Challenge, andhas received ENERGY STAR certification for 70% of its U.S.stabilized and managed portfolio by IT kW, more than any otherdata center provider.ENERGY STAR-certified data centers perform more efficientlythan 89 percent of data centers based on the EPA benchmark.Energy Efficiency Projects Summary 5 projects selected from the infrastructure upgrade energymanagement program portfolio for inclusion during theeligible period 2,079 MWh annualized energy savings; 9,539 MWhcumulative energy savings during the eligible period and21,586 MWh during the expected lifetime of theimprovements(2) 16% weighted average energy savings compared tobaseline energy usage Annual energy savings are comparable to the electricityneeds of 249 U.S. homes for a year(3) Example project types include: Replacing end-of-life UPSsystems with more efficient products, airflow optimizationand retrocommissioning in data halls, and LED lightingupgradesDigital Realty’s 31 ENERGY STAR-certified data centers areestimated to eliminate 678,000 metric tons of CO2 emissionsand save 959,000 megawatt hours annually relative to industryaverage data centers, enough electricity to power 115,000average U.S. homes for a year. Furthermore, Digital ergy.gov/partners/digital-realty-trustSee Appendix A for definition of eligible period. The expected lifetime of certain improvements may exceed the eligible period.Estimated based on U.S. EPA Greenhouse gas equivalency factorsDIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 12

Appendix EEligible Period Definitions and Green Building StandardsAdditional Information Provided by ManagementELIGIBLE PROJECTS & ELIGIBLE PERIOD DEFINITIONSCategoryEligible ProjectsAdditional NotesGreen buildingsSelected projects receivinggreen building certification fromJanuary 1, 2018 to December31, 2020Total development costsexcluding land. CumulativeImpacts (Appendix B) arecalculated from the date ofcertification through the term ofthe bond.Energy efficiencySelected projects completedfrom January 1, 2019 toDecember 31, 2020Cumulative Impacts (AppendixB) are calculated from the dateof project completion throughthe term of the bond or the endof the equipment useful life,whichever is shorter.20182019202020212022202320242025GREEN BUILDING STANDARDS(1)Leadership in Energy and Environmental Design (“LEED”) is avoluntary, third party building certification process developed by theU.S. Green Building Council (“USGBC”), a non-profit organization.The USGBC developed the LEED certification process to (i)evaluate the environmental performance from a whole-buildingperspective over a building’s life cycle, (ii) provide a definitivestandard for what constitutes a “green building,” (iii) enhanceenvironmental awareness among architects and buildingcontractors, and (iv) encourage the design and construction ofenergy-efficient, water-conserving buildings that use sustainable orgreen resources and materials.Building Research Establishment Environmental AssessmentMethodology (“BREEAM”) is a voluntary third-party buildingcertification process developed in 1990 by the U.K. BuildingResearch Establishment (“BRE”). BREEAM is one of the world’sleading environmental assessment method and rating systems forbuildings that sets standards for best practice in sustainablebuilding design, construction and operation. A BREEAMassessment uses recognized measures of performance set againstestablished benchmarks for (i) energy, (ii) water, (iii) the internalenvironment, (iv) pollution, (v) transport, (vi) materials, (vii) waste,(viii) ecology and (ix) management processes. 645 MMEnergy EfficiencyGreen Buildings1.BCA Green Mark is a voluntary green building assessment andcertification system developed in 2005 by the Building andConstruction Authority (“BCA”), an agency under the Ministry ofNational Development in Singapore, to support more environmentfriendly buildings. The BCA Green Mark certification processassesses environmental impacts related to (i) energy, (ii) water, (iii)environmental impact, and (iv) indoor environment quality.Refer also to the Listing ParticularsDIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 13

Appendix FData TablesAdditional Information Provided by ManagementCUMULATIVE IMPACTS DURING ELIGIBLE PERIOD(1)ANNUALIZED IMPACTSGreen BuildingsEnergy 297,0452,079299,12418,879,362-18,879,362Potable Water Savings59%-Total Water Savings55%-Construction WasteDiversion Rate93%-Green BuildingsEnergy 6,531Number of ProjectsCO2 Savings(MTCO2e)(2)Renewable energy(MWh)Energy Savings (MWh)Water Savings(gallons)Employment Impacts(jobs)5,567 Construction518 Permanent(3)38 Construction0 Permanent(4)CO2 Savings(MTCO2e)(2)Renewable energy(MWh)Energy Savings (MWh)Water Savings (gal)Allocation of Net Proceeds5,605 Construction518 PermanentProjects were selected based on the eligibility criteria identified in Digital Realty’s Green BondFramework. Allocation of the net proceeds from the January 17, 2020 issuance of 0.625%Guaranteed Notes due 2025, from the Green Bond Listing Particulars dated January 16, 2020,included in the Green Bond Allocation Statement, through December 31, 2020, were allocated toEligible Green Projects as set forth below, in accordance with the criteria set forth in Appendix A.Certain Eligible Green Projects may receive allocations from more than one green bond. This is donein a manner that ensures that there is no ‘double counting’ of eligible spend. Allocated values matchthe net proceeds of the 0.625% Guaranteed Notes due 2025, yielding a full allocation of the netproceeds as described in this Green Bond Allocation Statement.Exchange RatesThe exchange rate was determined based on the date of the issuance on January 17, 2020. Thisexchange rate value was subsequently applied to all projects not already denominated in Euros.1. See Appendix A for definition of eligible period.2. Estimated based on U.S. EPA Greenhouse gas equivalency factors3. Calculation is based on the total eligible investment allocated to the bond. Jobs data: https://www.uschamber.com/sites/default/files/ctec datacenterrpt lowres.pdf4. Jobs data: -opportunity.pdfDIGITAL REALTY GREEN BOND ALLOCATION STATEMENT 2021 14

sustainability program initiatives and project performance, economic, and social impacts. We believe our commitment to sustainability and our use of green bonds will encourage others in our industry to advance their own environmental commitments. In 2020 Digital Realty issued Euro-denominated green bonds, aligned with Digital Realty's Green Bond