Google’s Strategic Move with NV Energy
Alphabet’s GOOGL is steadily advancing towards reaching its zero-carbon goals. By partnering with NV Energy, a utility company owned by Berkshire Hathaway, Google is set to power its Nevada-based data centers with geothermal electricity. The tech giant aims to increase its usage of carbon-free geothermal electricity from 3.5 megawatts to 115 megawatts within the local power grid over the next six years. This initiative is made possible through a purchase agreement between NV Energy and advanced geothermal developer Fervo Energy, pending approval from state utility regulators.
Zero-Carbon Efforts in Full Swing
Google, having maintained carbon-neutrality since 2007, is relentlessly pursuing net-zero emissions across all its operations and value chain by 2030. The company is targeting a 50% reduction in its combined Scope 1, 2, and 3 absolute emissions before the end of this decade. To neutralize the remaining emissions, Google plans to invest in both nature-based and technology-based carbon removal solutions. Noteworthy is Google’s substantial investments in wind and solar energies, with 64% of its global operations currently powered by carbon-free energy sources. Transitioning to geothermal energy is a significant move as it harnesses naturally occurring underground heat for renewable electricity, unlike solar and wind power which depend on weather conditions. This shift from fossil fuels to clean energy is forecasted to drive cost savings in the short and long term.
Rising Tide of Carbon-Free Initiatives
The technology sector is witnessing a surge in carbon-free initiatives. Joining Alphabet in this movement are companies like Amazon, Microsoft, and Lam Research. Amazon, a frontrunner in renewable energy investments, is accelerating its journey towards powering its infrastructure with 100% renewable energy. Originally targeted for 2030, this goal is now anticipated to be reached by 2025, with 85% of the business already running on renewable energy as of 2021. Microsoft is aiming to achieve carbon-negative status by 2030, and plans to eliminate all greenhouse gas emissions by 2050. Meanwhile, Lam Research is dedicated to achieving carbon net-zero emissions by 2050 and operating entirely on renewable energy by 2030.
Reflecting on Sustainability and Profitability
In today’s landscape, environmental, social, and governance considerations are essential for establishing a sustainable business model. Investors worldwide are increasingly evaluating companies not just based on profit generation but also on the sustainability of their operations. Against this backdrop, Alphabet, boasting a Zacks Rank #1 (Strong Buy), is poised to attract investor confidence with its focus on reducing carbon footprint. The company has seen a 25.6% rise year-to-date, outperforming the Zacks Computer & Technology sector’s return of 10.2%.