Alphabet’s GOOGL is on the fast track towards achieving its zero-carbon goals. Partnering with NV Energy, owned by Berkshire Hathaway, Google is set to power its Nevada data centers with geothermal electricity. The tech giant aims to ramp up the use of carbon-free geothermal electricity from 3.5 megawatts to 115 megawatts over the next six years, pending approval from state utility regulators. NV Energy has struck a purchase agreement with advanced geothermal developer Fervo Energy to facilitate this transformative shift.
Path to Zero-Carbon
Google, already carbon-neutral since 2007, is now intensifying efforts to achieve net-zero emissions across its operations and value chain by 2030. The company has set ambitious targets, including a 50% reduction of combined Scope 1, 2, and 3 absolute emissions before the end of the decade. To neutralize any remaining emissions, GOOGL plans to invest in both nature-based and technology-based carbon removal solutions. Notably, Google’s substantial investments in wind and solar energies have propelled its global operations to be powered by 64% carbon-free energy.
Transitioning to geothermal energy marks a significant stride for Google, as this energy source harnesses naturally occurring underground heat to generate renewable electricity. Unlike solar and wind energies, geothermal energy is not reliant on the availability of sunshine or wind. This shift not only aligns with Google’s sustainability goals but is also poised to yield cost savings in the short and long run.
Industry-Wide Carbon Reduction
The tech sector is witnessing a surge in initiatives to reduce carbon footprints and drive down energy costs. Alongside Alphabet, industry giants like Amazon, Microsoft, and Lam Research are making concerted efforts to minimize their environmental impact significantly. Amazon, known for its robust investments in renewable energy, is making substantial progress towards powering its infrastructure solely with renewable sources by 2025, five years ahead of its initial target of 2030.
Microsoft is aiming to outpace Amazon by becoming carbon-negative by 2030 and eliminating all green emissions by 2050. Meanwhile, Lam Research has committed to achieving carbon net-zero emissions by 2050 and transitioning to 100% renewable energy by 2030.
Driving Investor Confidence
Today, environmental, social, and governance (ESG) factors are fundamental to establishing a sustainable business model that resonates with investors worldwide. Companies are no longer judged solely on profit-generating capabilities but also on their capacity to operate sustainably in the long term.
Alphabet, currently holding a Zacks Rank #1 (Strong Buy), stands out as a prime example of a company gaining investor confidence due to its robust efforts in reducing its carbon footprint. Year-to-date, Alphabet has delivered a commendable 25.6% return, outperforming the broader Computer & Technology sector, which posted a 10.2% return.