As part of its ongoing efforts to minimize its environmental footprint, Apple has issued $1.5 billion in bonds that will finance sustainable business projects. This is the largest ever "green bond" issued by a U.S. corporation.

On Earth Day 2014, a green leaf adorned the Apple logo at the company's Fifth Avenue store in Midtown Manhattan. The store is one of at least 120 Apple stores powered by renewable energy.

The bond—rated Aa1 (or high quality and very low credit risk) by bond rating agency Moodys—pays 2.85 percent over seven years, Sustainable Business noted. The bond is part of an overall package of $10-$12 billion worth of new bonds Apple is selling.

For the uninitiated, this green bond means Apple is specifically raising money from investors to spend on environmentally friendly projects. As any debt instrument goes, Apple will pay investors back with interest. Here is where the funds will go, according to the bond's prospectus:

  • New and ongoing renewable energy projects, such as solar and wind projects, or associated energy storage solutions

  • Green building expenditures such as certification of LEED Gold or Platinum or BREEAM Very Good, Excellent, or Outstanding standards

  • The implementation of environmental design elements for new or ongoing building developments, such as high performance mechanical systems, natural ventilation, on-site renewable energy and high performance lighting systems

  • Energy efficiency projects and technologies at Apple's corporate facilities, such as heating, ventilation and air conditioning systems upgrades, lighting retrofits and energy monitors and controls

  • Water efficiency projects and technologies at our corporate facilities, such as upgrades to water efficient fixtures and water efficient irrigation and increased use of recycled water

  • Projects that enhance recycling, material recovery and reuse, and landfill waste diversion for our products and facilities

  • Projects and technologies that facilitate the use of greener materials in our products

"This will allow investors to show they will put their money where their hearts and concerns are," Lisa Jackson, Apple's vice president of environment, policy and social initiatives, told Reuters.

Although the global green bond market is still taking baby steps in the financial world, the market is "growing rapidly," as Big Four accounting firm KPMG pointed outMarket Watch reported that November "was the strongest month on record for global green-bond issuance, with $7.39 billion in new bonds."

But what exactly makes a green bond, "green"? Well, it's unclear. As KPMG said, there is "little consensus on define criteria for green bonds" and issuers can face criticism and accusations of "greenwashing."

Apple is said to be following the Green Bond Principles established by a group of financial institutions including BlackRock and JPMorgan Chase. Such guidelines include second party consultation (for example a climate expert), publicly available reviews and audits, and third party, independent verification/certification.

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