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2018 Alphabet CDP Climate Change Response

Ardan Michael Blum

There is an amazingly revealing document found here in PDF and via archive.org here where we read "[...] Google's revenue is largely based on advertising. [...] Fluctuating socio-economic conditions due to climate change could have a negative impact on Google's revenue if they cause users to reduce the rate of economic transactions and thus causes advertisers to demand less online advertising. [...]". This obviously seems a rather self-centered view on WHY we need to control climate change! That said, let us read on:

"[...] Disclosing and properly addressing climate change risks and impacts associated with the IT industry and proliferation of the cloud is becoming more and more important. Not only does a company need to speak to the efforts they're making, they also need to show through their actions that they are making improvements or taking mitigation measures. Not addressing climate change risks and impacts head on could result in a reduced demand for our goods and services because of negative reputation impact. The 2017 Best Global Brands report, produced independently by Interbrand, ranks Google as the second most valuable global brand. Negative reputation could result in a decrease in brand value and in a loss of future brand equity. This risk driver could have a negative impact on our brands. For example, the 2017 Best Global Brands report, produced independently by Interbrand, estimates Google's brand value at approximately $142 billion. Using Interbrand's estimated brand value, a hypothetical reputational risk resulting in a 0.1% decrease in brand value could result in a loss of future brand equity of approximately $142 million. It is very difficult to predict the magnitude or potential occurrence of this risk, given the indirect nature of the relationship between climate change and online consumer economic activity. [...]"

Again: the focus is a "relationship between climate change and online consumer economic activity" with a growing risk to profit. So, the driving force may not be altruistic global love but, like other firms, change is leading to counter measures:

"Due to the increasing concern about climate risk, U.S. companies are stepping up on climate change at a pace never before seen. Driven by wind and solar sector growth, investments in U.S. renewable energy industry exceeded $40 billion in 2017 and cumulative U.S. private investment in renewable energy could reach $1 trillion in the near future. [...] Companies, cities, and states are calling upon the government to take bold action at the United Nations Climate Change Conference of the Parties (COP 24), which is currently being held in Poland. The conference aims to deliver on the Paris climate agreement to put the world on track to a low-carbon, sustainable future while keeping in global temperature to 1.5 degrees Celsius.

Sara Law, Vice President of Global Initiatives, CDP commented, 'A climate of policy uncertainty in the U.S. is a distraction for companies and cities that see the problem of climate change and want to be focused on handling these costly and material risks. The good news is CDP's data shows that these real economy participants have remained committed to action, bracing for impact despite distractions'." Via: www.cdp.net

The environmental non-profit CDP's (formerly the Carbon Disclosure Project) article states:

"[...] CDP's latest report, published this week, examines how corporations and cities across seven key states in the United States are reacting to climate change. Specifically, the report encompasses the findings from over 2,000 responses from US companies and cities filed between 2014 (the date of the last State by State analysis) and 2017 from US-based companies in Texas, Florida, Arizona, Colorado, California, Ohio, and Illinois. [...]"

Futher reading: New Analysis: Absence of National Policy Continues to Put U.S.-based Companies and People at Risk of Climate Change in Key States

Related: Google Environmental Report 2018

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