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American Tower Corporation

March 2023
By Vert Asset Management and
Nicolas Lopez-de-Silanes, Sustainable Finance Researcher

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VGSRX-company-profile-american-tower-corporation

“Our sustainability program is built upon three pillars—environment, social and governance —and our commitment has a positive impact on business performance.” – American Tower Storage1

Ticker

AMT (NYSE)2

Headquarters

Boston, MA

Market Cap

USD $98.6 billion

Company History

1995 begins as a subsidiary of American Radio
2012 becomes a REIT

Properties

approx. 223,000 communication sites
approx. 180,000 properties

25 countries

Green
Features

58 megawatts of solar capacity installed on 11,000 sites


Lithium-ion batteries for energy storage at 13,600 sites

VGSRX-company-profile-american-tower-corporation
Hollywood, CA Source: americantower.com

Streaming content on your phone? American Tower makes that possible.

As digital access expands, network operators need to continuously provide connectivity through wireless infrastructure. You might recognize some of these cell towers disguised as fake palm trees along a California freeway or even a shopping mall clock tower. Wireless infrastructure offers crucial support to the digital economy, enabling e-commerce, digital media and virtual education to name just a few applications.3

American Tower (AMT) was founded in 1995 and is one of the largest global REIT by market capitalization. AMT develops, owns, and operates 42,965 towers in the US and 223,000 communication sites globally.

AMT generates revenue by leasing space on cell towers and other types of wireless infrastructure to wireless carriers. To increase network coverage in dense urban areas, AMT arranges leasing agreements with rooftop owners.4 The company offers colocation so that multiple carriers can use a single site. AMT also builds broadcast towers for national broadcast corporations and local station owners.5

AMT provides on-site backup generators to its customers during power outages. Utility service disruptions are occurring more frequently due to extreme weather and our aging “grid” infrastructure.6

The world’s transition to the “internet of things” has increased demand for streaming data which now dwarfs demand for telephone or voice data (See Figure 1). Streaming a 30-minute TV show takes 1250 megabytes of data or 83,333 times the 0.02 megabytes of data used to pen an email (See Figure 2). With the increase in interconnected data services, the company’s mission is to make wireless communications possible everywhere.

amt-network-voice-data
Figure 1: Network and Voice Demand. Source: T. Riddiough (2021), Wireless Real Estate: Business Model, Real Estate Attributes, and Competitive Market Structure.
amt-network-demand
Figure 2: Average Data Used by Activity (in megabytes). Source: American Tower, 2021.

Why are wireless towers included in the real estate asset class?

One defining real estate characteristic of cell towers is that they are installed in a fixed location such as on land or on a rooftop. The construction and development process for wireless infrastructure is carried out in the same way as for other types of real estate which involve siting, land acquisition, architectural design, zoning, land-use regulation review and construction.7

Second, wireless infrastructure derives income from rents with multiple tenants (or colocation) using the same site(s).

The business model of tower REITs diverges from that of traditional real estate. Growth in wireless infrastructure capacity is attributed to increasing demand for data use. Tower REITs often trade like tech stocks more than real estate stocks.8 Modern society’s increased reliance on devices and interconnectivity requires wireless carriers to continue to expand and improve their networks.

How can a tower REIT help green the digital economy?

A company that recognizes the role of business to enable a transition to a low-carbon economy takes action throughout their organization board level governance to daily business activities.

AMT’s board of directors’ corporate governance committee has direct oversight of ESG programs and policies. The Global Sustainability Committee sets targets for the company and the Chief Sustainability Officer (CSO). The CSO reports directly to the Board.9

As part of a Paris-aligned strategy, in 2021 AMT set science-based targets initiative (SBTi) to reduce Scope 1, 2, and 3 emissions. Scope 1 emissions come from combustion vehicle or equipment owned by the company. Scope 2 emissions are from any purchased energy. Scope 3 emissions attempts to capture indirect emissions from business activities such as business travel, capital goods purchase or tenant energy use. SBTi’s are globally aligned, climate science backed emission reduction goals that seek to reduce carbon emissions to effectively limit the earth’s temperature in compliance with the Paris Agreement. The company committed to reduce absolute scope 1, 2 and 3 greenhouse gas (GHG) emissions 40% by 2035 from a 2019 base year.10

Project Spotlight: Diesel Reduction at Sites

A significant portion of AMT’s GHG emissions are due to diesel consumption for on-site generators to provide power to tenants. This is particularly the case in markets where communication services for tenants are provided through unreliable electric grids or are situated in rural areas. AMT’s Asian and African markets account for approximately 99% of the total diesel assets purchased by AMT.11

AMT decreased diesel use and increased on-site energy efficiency with renewable energy and installing energy storage systems. More than $400 million has been invested in this strategy since 2012, allowing the company to extend its portfolio to include over 58 megawatts of solar capacity in approximately 11,000 sites. AMT also equipped 13,600 sites with lithium-ion batteries for energy storage.12 Battery storage helps to improve reliability and flexibility of power at the sites.13

AMT also upgraded 40% of their sites to LED lighting systems. These lighting systems use 65% less energy and have a lifespan 10 times as long as traditional lighting.14

amt-solar
Figure 3: Solar Installations and On-Site Solar Capacity. Source: American Tower Sustainability Report 2021.
1American Tower Corporation (2022). https://www.americantower.com/
2American Tower is 4.74% of the Vert Global Sustainable Real Estate Fund (VGSRX) as of December 31, 2022.
3T. Riddiough (2021). “Wireless Real Estate: Business Model, Real Estate Attributes, and Competitive Market Structure.”
4American Tower Corporation (n.d.). “Rooftops: Cell Sites for Network Capacity/Coverage Gaps.” AMT. https://www.americantower.com/us/solutions/rooftops.html
5American Tower Corporation (n.d.). “Broadcast Transmission Tower Sites with Master Antenna Leasing.” AMT https://www.americantower.com/us/industries/broadcasters.html
6American Tower Corporation (n.d.)“Backup Power: Shared Generator for Network Outages.” AMT. https://www.americantower.com/us/solutions/backup-power.html.
7T. Riddiough (2021). “Wireless Real Estate: Business Model, Real Estate Attributes, and Competitive Market Structure.”
8ibid.
9 American Tower Corporation (2022). “Sustainability.” AMT. https://www.americantower.com/sustainability/index.html
10Science-Based Targets Initiative (2023). “Companies Taking Action.” SBTi. https://sciencebasedtargets.org/companies-taking-action#dashboard
11American Tower Corporation (2022). “Sustainability Report 2021, American Tower”. https://www.americantower.com/sustainability/index.html
12ibid.
13American Clean Power Association (n.d.) “Benefits of Energy Storage.” Energy Storage Association. https://energystorage.org/why-energy-storage/benefits/
14American Tower Corporation (2022). “Sustainability Report 2021, American Tower”. https://www.americantower.com/sustainability/index.html

Please refer to the Prospectus for full risk disclosures. All data as of December 31, 2022 and subject to change daily.

The Vert Global Sustainable Real Estate Strategy operated as mutual fund from October 31, 2017 and prior to the fund reorganization on December 4, 2023. The investment objectives have not changed.

Investing involves risk. Principal loss is possible. Investors should be aware of the risks involved with investing in a fund concentrating in REITs and real estate securities, such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. A REIT’s share price may decline because of adverse developments affecting the real estate industry. REITs may be subject to special tax rules and may not qualify for favorable federal tax treatment which could have adverse tax consequences. The Fund’s focus on sustainability may limit the number of investment opportunities available to the fund and at time the fund may under perform funds that are not subject to similar investment considerations. Diversification does not assure a profit or protect against loss in a declining market.

Please refer to the prospectus for important information about the investment company including investment objectives, risks, charges and expenses which must be considered carefully before investing. You may also obtain a hardcopy of the prospectus by calling 1-844-740-VERT. Read it carefully before investing.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance is annualized for periods greater than 1 year. For performance current to the most recent month end please call 1-844-740-VERT. Standardized performance of the Fund is viewable under the Information tab. Click here for standardized performance of the Fund.

Fund holdings and/or sectors are subject to change at any time and are not recommendations to buy or sell any security. Current and future holdings are subject to change. Click here for the Fund’s current top ten holdings.

Basis points are otherwise known as bps or “bips,” are a unit of measure used in finance to describe the percentage change in the value of financial instruments or the rate change in an index.

The Fund is offered only to United States residents, and information on this site is intended only for such persons. Nothing on this web site should be considered a solicitation to buy or an offer to sell shares of the Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

ETFs are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an ETF’s shares may trade at a premium or discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a Fund’s ability to sell its shares. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Environmental, social, and governance (ESG) criteria refer to activities that contribute to the business that not quantified in typical financial reporting.

The Vert Global Sustainable Real Estate ETF is distributed by Quasar Distributors, LLC.

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