(Bloomberg Businessweek) -- A year ago, Sundar Pichai, Google’s chief executive officer, pledged that his company would spend the next decade eliminating carbon emissions from its offices and data centers. This means that each Google search, Gmail message, and YouTube video will be powered, every hour of the day, only with locally sourced clean energy—an unprecedented accomplishment in the corporate world.

In certain places, Google’s path is clear. At Bay View, its newest Mountain View, Calif., campus, which is set to open next year, the buildings are slathered with solar panels in a design Google calls “Dragonscale.” The company expects to get around 90% of its energy without emitting greenhouse gases. Google has purchased enormous amounts of renewable energy in South America and Europe, including a 92-megawatt deal for a towering offshore wind farm off Belgium’s north coast.

But in other locations, Google will need to rely on some energy sources and technologies that don’t yet exist. Bloomberg Green delves into the details and challenges of Google’s decarbonization plan in its latest issue.

Pichai, who is also CEO of Google parent Alphabet Inc., sat down with Bloomberg Green in September to discuss the company’s efforts. He sees moving to carbon-free energy as an “innovation opportunity” that could help Google’s future business, particularly in cloud-computing, although he admitted that achieving his goal may require the company to make unprecedented sacrifices. Pichai spoke about his outlook on the climate crisis, his conversations with other business leaders, the criticism Google faces for working with oil and gas companies, and the legacy he hopes to leave his children.

The interview has been lightly edited for brevity and clarity.

What are you trying to accomplish with this new campus?

We’ve always, as a company, cared about our spaces. Early on, we had this view that designing great spaces can really affect productivity and culture. So a lot about this building is making sure we get this right—this nice, open space, nice lighting.

But as part of that, we wanted to set an example on sustainability. In some ways, you can think about technology as open source. Once you put out open source software, all of us build on it. So we’re doing visible things and sharing everything about how it’s done. I think it will get replicated and adopted, and we will learn a lot, too. The fact that you can build a nice building in a cost-effective way, which has tremendous energy savings—and showing that it can all be done—was a big, big part of it.

Obviously, the Dragonscale solar panels were a big feature. To me, it’s kind of a statement, simply showing that building solar roofs can be aesthetically amazing, delivering energy savings and so on. Overall, it fits the theme of pushing technology and boundaries.

Solar and wind energy are getting cheaper. But there are parts of your 24/7 carbon-free goal, such as lithium-ion batteries and geothermal, that are experimental and could be expensive. Are you worried about costs?

It is a moonshot, as we define it. So it’s a bit stressful, because we don’t fully have all the answers to get there. But if I were to go back [to] when we originally did all [these] big wind and solar purchases, cost was an issue. In the last 10 years, wind has come down 70% and solar has come down like, around 90%. So in some ways we’re betting on that technology curve, and that gives us comfort. If you’re early in an investment or technology, things go on a curve.

We are doing geothermal for the first time for our Nevada data center. We hope that’s part of the appeal here. We can bring new technologies, solve new problems as part of that, provide the initial funding for some of these projects, and drive that curve down. It’s a role we think we can play at the early end of the cycle.

How would you respond if Wall Street said you were investing too much money in this?

First of all, on the most practical basis, I think our employees demand this as a value. We’ve always had it as a value. It will help us hire the best talent over time. That’s one example of a business case.

But honestly, I would say when you work on such technologies, when you do that kind of [research and development] and innovate, I’ve never seen a time when that doesn’t translate into other benefits for your businesses. Us figuring out how to cool our buildings more efficiently makes its way as a cloud offering over time. We are using AI [artificial intelligence] to shift loads across data centers. We are using AI to improve cooling. All of that will make its way through the work we do across Google and Alphabet. So, I just don’t see how investing on the tip of the tree of technology innovation is not [return on investment]-positive over time.

Are you an optimist about the climate crisis?

I’m optimistic. But I’m worried and very anxious we’re losing time.

The good news is that people are becoming more aware of it than ever before. I sense that urgency. The bad news is that some of it is coming as people see real-world examples of these kind of interconnected climate events. I wish we were at this moment a decade earlier.

But having said that, there are moments I get optimism from feeling that there’s a tipping point. The generation coming up just fundamentally views it as a different priority. That gives me long-term optimism.

The anxiety comes from the fact that we know scientifically we are already in a dire state. That’s the urgency. But I look at what happened in the last decade. I gave you the wind and solar example—how much it changed in 10 years, more than even what we expected. Looking at electric cars 10 years ago, I’m sure there was real speculation as to: Would this ever happen? Now, I don’t think anyone would question that. Cars will be electric, and the commitments are underway and the transition happening. Like that, I see efforts underway in all areas. That gives me optimism.

Is this something you’re talking about with other business leaders? What do those conversations look like?

Ironically, in most conversations with other CEOs—it could be as part of a cloud project or something— sustainability is literally on the CEO agenda of pretty much every company we’re working with.

Why’s that ironic?

What I mean is, it’s not probably what is obvious from the outside. If I have a half-hour meeting, sustainability is part of it, even if the two companies may not be directly doing something on sustainability together.

When did that change?

I felt it over the past 18 to 24 months, a sharp change. There are real conversations around ESG [environmental, social, and governance] disclosures. People want to understand how we are doing it. They’re all trying to figure out how to make commitments, how do they make sure they can deliver value out of it. It’s a big, top-of-mind conversation right now.

One thing that you and your team have mentioned is that you want this to be replicable. What do you say to another company that wants to go carbon-free that doesn’t have your market cap or your engineering talent?

A few things. I fundamentally feel that they are going to have to do it anyway, over time. Getting on the journey early matters. It’s an innovation opportunity. It’s a culture-transformation opportunity. Because you’re doing something innovative, it changes the organizational mindset. For people who are looking at transformation, it’s actually a real opportunity.

If you don’t do this correctly, you won’t be able to attract talent over time.

You’re seeing that in the data?

I don’t know whether empirically, if we weren’t doing what we were doing, I think we would see an impact. It’s a good question. We haven’t run an A/B experiment. But when I look at the younger generation—people who are teenagers now—I can’t see them making the choice to work for a company which they feel is polluting in the world. I think the mindset will change.

Speaking of—you’ve talked about how this is personal for you. What do your kids tell you about this issue?

It’s a big topic. The most-fitting moment was that dystopian sky moment in the Bay Area almost exactly a year ago. They had a lot of conversations, and they asked questions about it. It’s our chance to pass the world in a good way to the next generation.

So I feel that moral imperative. Pretty much every parent feels the same way.

You mentioned the recruiting challenges for companies seen as polluting. Some of your employees have criticized your cloud work with oil and gas companies. Do you see those as counterproductive to the 24/7 goal?

We do work with companies in all sectors. We have clear acceptable-use policies, and we’ve articulated AI principles.

I actually feel it’s very important that the leading companies help partner and help the energy industry transition to a renewable sector. AI will play a role there.

You think they’re moving fast enough?

Different people are on different stages of the journey. But there are people seriously thinking about transformation. I think policy is going to be important in this. So we have advocated for policies for more aggressive emission reductions targets and so on.

We do work with [energy companies] with cloud. This probably represents well less than 0.1% of our revenues. But I think it’s important when you’re providing technology; many of them are thinking about transformations. We want to play a role in that.

You mentioned policy. That’s something that I’ve talked about with your team, about this carbon-free goal. Technology and procurement can only go so far, it seems. Are you going to earmark more lobbying spend for energy in the next decade?

We have always advocated for issues in our conversations. Getting the U.S. to rejoin the Paris Agreement, etc. That’s always been on top of our agenda.

A lot of the state and local level where we do projects—including our data centers—we have renewable energy, and sometimes we find ripple effects. So we do this a lot by engagement. I haven’t quite thought lobbying is the best way to accomplish it for us vis-à-vis the investments and innovation we can do. But we’ve always advocated for these issues.

What’s an example of a ripple effect?

I remember in Iowa, when we did our data centers. There are other projects which get kicked off underway in the communities. Government officials see the positive coverage coming for a renewable energy project and the attention it brings. It changes mindsets.

I think that’s the best way we influence the area: showing by doing. That has a tremendous impact in terms of change. It’s no different than if you know someone who has bought an electric car—you’re more likely to buy an electric car. The same thing plays out at all scales.

Have you talked to the president about these issues?

Not specifically about this. But we’ve definitely engaged with members of his staff and administration. We’ve clearly talked about our sustainability progress. On pretty much every engagement I've had, it’s been a high priority for us.

What more do you think Google and the tech industry could be doing on decarbonization?

I’m pleased with the level of awareness, the level of investment. I think many companies are pushing the boundary here.

I don’t view this as a competitive thing. We all share one planet. It’s not just a chance for tech companies to do things together. We need global cooperation and scale to actually make this transition. So, I see that as an opportunity as well.

Increasingly, if you look at the pandemic or climate or AI safety, all of that is going to need global cooperation. In some ways, I think it’s something we all need to learn how to do better. If you don’t do it that way, we won’t be able to solve it.

What does global cooperation look like? What role does Google play on this issue?

Obviously, the Paris accord is an example. We are supporting the European Green Deal. As an industry, when they ask for commitments, we are signing up: private-public partnerships; doing it internationally; arriving at shared disclosures, metrics, transparency, and goal-setting; creating international markets; shared energy policies. All of that would be important.

One thing that’s interesting about your 24/7 plan is that it seems to treat energy as a finite resource. Does Google need to make sacrifices to hit this goal? What are those?

It think it will be a constraint. If we need to scale up compute in a certain way, we want to do that within this constraint of reaching carbon-free. We should be able to scale up compute, etc., not in a way that contributes negatively to the environment.

As part of that, there will be sacrifices we will have to make. There may be regions of the world we can’t quite invest in this way, because we can’t get to a carbon-free state. It may lead to some services we can’t build. That will be a reality if we don’t solve it.

It seems like, in Asia that will be really difficult.

It’s difficult, but you know, I’m excited. Because if you speak to the government of Singapore, etc., they are very focused on this. I see them thinking. They are also places that they do long-term planning really well.

I’ve run into amazing entrepreneurs and companies working to solve these problems, too. I see the startup activity and innovation, be it in nuclear, hydrogen, storage.

Would Google start a climate-based fund?

We’ve always invested in companies, so we’ll continue to be aggressive there. For X [Alphabet’s research lab], this is part of the work they do. Naturally, we’ll do more on climate.

There’s Fervo, the startup you’re working with in Nevada that is developing geothermal energy wells.

Yes, there’s an example of the kind of innovation I’m seeing on the other side. I haven’t directly spent time with them but obviously, I’m hearing updates. The background of taking techniques, which you’ve learned from oil and gas extraction, and applying it to geothermal makes sense to me.

Are there any others you’re looking at?

We have spun out a company from X around long-term storage for energy. We are definitely running into many nuclear fusion startups. We are helping them with AI and cloud in some cases.

Thinking about the grid and how to do that better will be part of it. We have an effort at X around that. I’m trying to spend time on understanding the innovation and helping in areas Google can. They will all need cloud [and] AI. So it’s aligned with our business goals as a company, too.

There are some emissions that aren’t part of your 24/7 goal, like hardware manufacturing and employee commuting. Are those areas where you see having to make sacrifices? Will you have to put constraints on your hardware business?

We are obviously thinking a lot about our supply chain everywhere. We committed to purchasing 5 gigawatts of renewable energy in places where our suppliers operate as part of that. They don’t have access to that source today. So we are playing a role in creating renewable energy supplies. We’re trying to help with that transition.

As part of our Made by Google efforts, we’ve made commitments on sustainability: offsetting carbon use in shipments, making sure the provenance of everything we use is transparent. Over time, we will meet the commitment to use recyclable materials wherever we can. Those are all areas we are thinking about.

We’ve focused more on where we, as a company, consume the most.

We really appreciate the time.

Well, thanks for focusing on it. Over time, I think it’s going to be a massive innovation opportunity.

Timely, too. I’m sure you’re paying attention to Tahoe and the East Coast?

That’s the sad part. I genuinely felt it, growing up. We would get rain for only three weeks a year. You would still get droughts, but if the rain didn’t happen for those three weeks, the droughts were really bad. So this intersection of how climate affects life is—I’ve always felt it.

Even watching New York, those flash floods: I literally was on a video call with people in New York and I asked someone to mute because it was so loud and I didn’t understand why. It was suddenly raining a lot. And later, seeing the pictures of the subway stations. Obviously, some of it is related to climate, some not. But the ripple effects and the runaway scenarios are really scary. These are one-in-a-hundred-year events we’re seeing.

 

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