Why Renewable Energy is the Right Decision for Google's Green Data Center

Google was nice enough to let me know yesterday that they would make a renewable energy announcement today, and I have a bit of time to think about the impact of the announcement.

More renewable energy for our data centers

September 26, 2012
We announced our commitment to carbon neutrality back in 2007, and since then we’ve been finding ways to power our operations with as much renewable energy as possible. In our latest step toward this end, we just signed an agreement with the Grand River Dam Authority (GRDA) to green the energy supply to our Oklahoma data center with 48 MW of wind energy from the Canadian Hills Wind Project in Oklahoma, which is expected to come online later this year.
This brings the total amount of renewable energy for which Google has contracted to over 260 MW.

The press release went live at 7:00a PT this morning and as expected GigaOm's Katie Fehrenbacher and DatacenterKnowledge's Rich Miller put up posts quickly.



What comes to mind when I see Google's actions is a speech from UPS's Scott Davis Chairman and CEO about Right Turns at the Right Time.

Here are parts of the speech that support the idea of doing the Right Thing for the environment.

Why are so many companies struggling to survive, let alone grow in value?

 Making the right choices for the long time is part of his theme, and how it fits into sustainability.

I believe that some companies made expedient decisions¿ or took ill-advised shortcuts¿ that compromised their reputations, and in the long-term, their underlying value.

There is no question that this is a challenging economic environment. It's very tempting to take the quick, cost-cutting approach without carefully considering the impact on your company's reputation.

In the short time we have together today, I'd like to share my perspective on the vital role your company's reputation should play in your strategy and decisions.

I'd like to address two topics:

* First, why reputation should matter to every company, large and small, and why you should guard it zealously. Why, in my view, it's the bedrock of long-term profit, and sustainability.

* Second, what we can do to ensure that our companies' reputations do not become the victim in this belt-tightening environment . And

Why is this so important?  This is part of your brand and choices customers make.

Let me frame my comments by saying that reputation to me essentially means the degree of trust, admiration, and esteem that stakeholders have for a company.

Jeff Bezos, the CEO of Amazon, and someone I admire greatly, defines reputation in a more candid way : He says "reputation is what people say about you when you leave the room."

Yeh, yeh doing the right thing is important, but I am about the bottom line.  Well the bottom line is your reputation in the customers mind is worth billions of dollars, even to Google.

According to most reliable sources that study issues involving corporate reputation, the value of a company's reputation capital¿ its intangible assets such as brand equity, intellectual capital, and goodwill¿ is enormous.

It can constitute between 70-80%, and in some cases, such as Google and Coca Cola as much as 90% of a company's market value.

UPS's brand value has been placed as high as $21 billion dollars. That's "B" as in billions . . .

I see a few CFO's out there, and I can tell by the smiles on their faces that I just got their attention!

The environmental aspect is key to UPS's strategy.

We have implemented many environmental programs company-wide, but our efforts in this area are perhaps best illustrated by our initiatives relating to our vehicles.

For nearly 80 years, we've been focused on fuel conservation, long before it became the critical issue that it is today.
In the 1930s, for example, we pioneered the use of electric-powered vehicles in New York City.

Today we operate the world's largest fleet of low-emission vehicles, approximately 20,000 of them, and that number will continue to grow.

We also operate the largest alternative fuel-fleet in private industry. That includes natural gas, liquefied natural gas, propane, fuel cell, electric, hybrid electric, and hydraulic hybrid fleets.

Our entire delivery network has been re-engineered for more environmental benefit. You may have heard it described in the press as the UPS Right Turn Policy .

I can see a few of your smiling out there, and I know what you may be thinking¿ but it really works.

We carefully map-out routes for all our drivers to reduce the number of left-hand turns they make.

And, here is a statement that will really get your attention.

The bottom line for us is that our stakeholders need to know that when it comes to the environment, we intend to be part of the solution, not part of the problem.

Who would think that this is a speech that comes from UPS's CEO?

But when it involves your company's reputation, you have to have the courage for the long haul :

* The courage to cling to your convictions
* The courage to place reputation at the head of the line...Every Time!!
* The courage to maintain, despite all the howls of protest, clarity of purpose, and relentless focus on your company's reputation

Second, do the right thing at the right time . . . repeatedly.


In closing, let me leave you with this challenge: When it involves your company's reputation, do what's right over what's easy.

I hope this helps you look at how Google's Green Data Center efforts fit in an overall strategy and it is important enough to hit the Official Google Blog.

we’re a growing company with a corporate mandate to use clean energy for our operations in a scalable way.