Can Google stay “Googley” with climate change?
Few people will argue that Google’s staggering business growth, innovative products, luxurious perks, and futuristic campuses make it one of the most sought-after places to work. These were certainly key considerations that drove me to work there for a number of years. However, the long-term viability of each of these key factors warrants more scrutiny in the context of global climate change. Can Google maintain all the things that make it “Googley” in an environment where physical changes to the world will affect the very places it has employees?
It may not seem obvious that climate change could affect Google’s day-to-day operations. However, Google, like most large technology companies, relies heavily on the use of data centers to power its operations. Data centers are incredibly energy-intensive structures, consuming in many instances 100-200 times the energy of a typical office building [1]. Regulation targeting greenhouse gas emissions has the potential to restrict energy supply and thereby increase energy costs [2]. As a result, Google’s operating margins for its core business are incredibly susceptible to potential energy price volatility driven by climate change [3].
Climate change will likely affect a number of additional parts of Google’s business, especially those with deep supply chains. One critical part of Google’s culture is the fresh, delicious, and free food prepared onsite with the help of a complex network of food distributors and farmers who bring high-quality ingredients to the Google campuses worldwide. Climate change may threaten the financial viability of this offering by increasing temperatures and the frequency of extreme weather events, which would in turn limit food production and increase food costs [4].
Finally, climate change is a key consideration for Google’s long-term planning for physical space. The design and location of buildings is an important and beloved facet of Google’s culture for employees and visitors alike. One key impact of climate change is rising sea levels, which threaten to submerge two-thirds of the world’s largest cities due to their low altitude [5]. In particular, Google’s headquarters and the homes of many of its employees are located in Silicon Valley, which is 3-10 feet below sea level and dependent on levees to hold back seawater [6]. The design and location of physical space must account for the risk of sea level rise in the areas most affected.
Google is not standing pat, however. First, the company has worked hard to ensure that its data centers are best-in-class in terms of energy efficiency. Its data centers consume 50% less energy than the typical data center, by employing techniques like using outside air in cold environments and reusing water sources [7]. In addition, the company provides shuttle transportation for about 6,400 employees daily, which reduces emissions by getting individual cars off the road [8]. In terms of its real estate, Google attempts to build energy efficiency into as many facets of the workplace experience as possible. For example, Google installed solar panels on a number of buildings in its headquarters that supply 30% of peak energy consumption [9]. Finally, Google has committed to use 100% renewable energy and has made considerable investments in renewable energy [10]. In fact, its commitments would make it “one of the largest corporate investors in renewable energy in the world,” which is fairly unique for a technology company [11].
Despite this high level of awareness and effort, there are still additional avenues Google can pursue. First, its current (publicly announced) plans do little to address the concerns raised above about physical space and the impacts of sea level rise. Google has a presence in just about every major coastal city in the United States [12]. This strikes me as a prime opportunity for investment in climate change adaptation projects, such as fortifying levees in low-lying coastal cities. This is typically a task we expect of government, but given Google’s considerable resources — over $5 billion in net income in Q3 2016 — there is ample capacity to take a more active role in attacking challenges from climate change [13].
In addition, Google is well-positioned to monetize opportunities presented by climate change. One example is cloud-based storage, an opportunity for which Google recently commissioned a study that showed that cloud computing could reduce IT energy costs by 87% [14]. Google already provides cloud-based services, but if climate change has a significant impact on energy prices, this market could open up significantly.
Google of the future could look massively different from the Google of today, depending on a number of uncertain factors related to the planet. Although preparation for climate change is never mentioned in the “best place to work” reports, it could theoretically impact the culture of any of the ranked organizations in obvious or subtle ways – perhaps we should expand our evaluation criteria.
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References:
- United Nations Environmental Programme, “GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector,” pg. 36.
- Ibid, pg. 22
- Ibid, pg. 36
- Henderson, Rebecca M. et al. “Climate Change in 2016: Implications for Business,” pg. 4-5 (October 2016).
- Ibid, pg. 4
- United Nations Environmental Programme, “GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector,” pg. 36.
- Google, https://www.google.com/green/efficiency/datacenters/
- Google, https://www.google.com/green/efficiency/oncampus/#commuting
- Google, https://www.google.com/green/efficiency/oncampus/#building
- Google, https://www.google.com/green/energy/
- Google, https://www.google.com/green/energy/
- Google, https://www.google.com/about/company/facts/locations/
- Google, https://abc.xyz/investor/news/earnings/2016/Q3_alphabet_earnings/
- Google, https://www.google.com/green/efficiency/industry-collaboration/
Photo credit: https://www.google.com/green/energy/
Working for a company highly impacted by macro trends such as climate change and digital innovation allow me to consider embedding these trends into our business strategy and come up with mitigation and growth plan. It’s interesting to see big companies such as google to take on initiatives because millions or billions of people’s lives will be changed depending on these companies’ decision. I am especially interested in Google’s future strategy around smart home and autonomous drive vehicle incorporating sustainability strategy
Great post Jason! Interesting concept, considering climate change’s impact on employee culture. I agree with Bastiane’s comment – Google is doing so many exciting things and many people are looking to Google to for the next trends in innovation and technology. And I agree with you – why not in climate change action too? You mentioned that Google is well positioned to step outside of its traditional role and assist with public projects like levees. I would take that a step further & suggest that Google should explore interconnected & data-driven public projects; “smart” levees that predict catastrophic events could be incredibly useful!
Jason – this was fascinating! I did not know how energy-intensive it is to be in the business of data. For the cloud computing benefits then, is Google able to reduce energy costs for the consumer without taking on any additional energy costs of their own? I agree that climate change action is an important next step for a company with the scale and influence of Google. Could they do more to set the standard for technology firms and their commitment to sustainability? Perhaps a good way to start on this front could be to formalize their key initiatives – renewable energy goals, energy savings, limitation of GHG emissions, and more – and challenge other companies to achieve these goals as well.
Really great insider perspective, Jason. I can’t think of any company that is better placed to tackle the gap of between consumers and producers on climate change than Google, the gatekeeper of a majority of the world’s information. Besides their own footprint and initiatives around reducing it, I wonder what else Google might be able to do in the consumer space beyond its own industry? When I think of companies leading the agenda, Google seldom comes to mind. That being said, their research into projects such as the driverless (electric) car will undoubtedly have a huge impact and gives them the right to play more actively in the fight against the hydrocarbon economy. Of course electric vehicles and cloud storage data centres can be blamed for simply shifting the energy more upstream, net net they are helping move us in the right direction. What would it take for Google to step out and take ownership of this as ‘their fight’? I don’t imagine that there are that many internal barriers but are they trying to be too PC to the anti climate change lobby?
This was an interesting article. Google is a very unique company not only because of their massive bottom line, but also because they are willing to invest some of those profits into projects with a very long horizon that might not pan out for the company. I would love to see them implement some of the ideas you suggested. I think companies like Google have the potential to make an enormous impact on the climate by investing in projects that other companies cannot or will not. I hope that they explore radical and innovative solutions to climate change in the coming years.
Thanks for the interesting post! The first time when I knew that data centers actually consumed lots of energy, I was so shocked – that means every dingle search we did on Google consumed some energy. In the era of internet, people tend to think that everything online would reduce the energy consumption, but in reality, we still need to be aware of the impact on climate change from our actions. In addition, the cloud computing was also very interesting. I have never thought that by improving the algorithm to calculate data faster and using super computer to calculate data together, people could reorganize the scattered calculation we have done with our personal computers and processed it more efficiently. However, on the other hand, the increase of internet connection might also increase the energy consumption, so maybe Google needs to take a step further to examine the total effect it causes. Thank you again for the sharing!
Interesting insights, Jason! I really love that Google is being so proactive about helping climate change, but I wonder if there is a way to make climate change policy even more embedded in the organization. As you said, Google employs so many people in so many places that will be directly impacted by climate change, especially a rising sea level – I wonder if Google could ingratiate climate change into their culture to create a collective group of people who each do their part in mitigating the effects of climate change (i.e. encouraging using clean energy and composting in their homes, etc.). As an industry leader, I would also venture to guess that many other companies would follow suit, and then we would have a large army of people each creating some incremental climate change benefit.
What an intriguing post, thanks Jason! As someone who plans on working in technology, this is an issue that is very near and dear to my heart. As a society, we have gotten more and more data hungry as time has passed and the problem will only continue to get worse. It is expected that digital data storage will grow at 42% annually through 2020 (http://strongboxdata.com/resources/industry-insights/), which is pretty scary given the effects these costs will have on the climate. It’s great that Google is not only trying to make their data centers best in class in terms of efficiency but they also created a way for other companies to take advantage of their own data centers. It would be near impossible for smaller companies to achieve the efficiencies that Google has. That being said, I think it would be great if they could be a bit more open about their practices so that other companies at scale could learn from them and improve.
Interesting post. On your point regarding Google’s data centers and the energy that they consume, I’d argue that this will become less and less of an issue as more companies shift their IT workloads from private servers in data centers to the private or public cloud through services like Amazon Web Services (“AWS”). Through AWS, companies like Google will be able to share servers with other divisions within the company (private cloud) or with other companies entirely (public cloud). By so doing, Google will be able to minimize the energy used for servers that run only limited number of workloads per day. That said, this assumes increased security of cloud services, something that has thus far lead companies to only shift their least sensitive workloads to the cloud.