Responsible Supply Chain Projects
Building an energy-efficient, low-carbon supply chain
Google celebrated 10 years of carbon neutrality in 2016, an accomplishment we’ve sustained through a combination of aggressive energy-efficiency initiatives, renewable energy purchases, and carbon offsets. Our data centers are some of the most efficient in the world, improving their environmental performance even as demand for our products has risen dramatically. And in 2017, we matched 100% of the electricity consumption from our global operations with purchases of renewable energy from around the world. Today, we’re the world’s largest corporate buyer of renewable power, having procured more than 3 gigawatts of wind and solar energy.1
Applying these energy-efficiency and renewable energy strategies across every part of Google’s operations is critical as we tackle the threats posed by climate change. Now we’re working to apply these same learnings and strategies to our supply chain.
Increasing energy efficiency
Google maintains ambitious targets for reducing our Scope 1 and Scope 2 greenhouse gas (GHG) emissions. We’re also taking steps to reduce our Scope 3 GHG emissions. This includes working with our suppliers to improve their environmental performance by helping them get more out of every watt of energy they consume.
Many suppliers are interested in energy efficiency but lack the capital, business motivation, and expertise to implement energy management programs at scale. In response, we worked with the China National Institute of Standardization (CNIS) to launch the Technical Pilot Program for China Energy Management and Performance Evaluation to help our supply chain partners in China adopt better energy management systems, track energy performance at their factories with Google production, reduce energy consumption, and improve operational performance.
Google and CNIS led engagements with two of our key suppliers in 2017 to help convey the value of energy management and energy efficiency in the electronics industry. These suppliers have already begun to save energy and money.
The objective of the pilot program is to help develop strategies for manufacturing companies across China to embrace energy management best practices and encourage the adoption of robust energy management systems, such as ISO 50001. Upon completion of the 18-month program, participating companies should be equipped with the necessary tools, resources, and knowledge to implement and sustain robust energy management systems in their factories. CNIS is the lead organization sponsoring the program. A nonprofit research institute supporting China’s National Development and Reform Commission, CNIS provides technical guidance and national standards for energy efficiency. The program’s emphasis includes the following:
Training and coaching: Manufacturing companies receive free tailored training and personalized coaching to implement energy management systems and identify energy- and cost-saving opportunities.
Energy savings, cost savings, and productivity improvements: Participating companies are positioned to reduce energy costs and improve productivity by having a better understanding of energy use at their facilities.
Continuous improvements in energy performance: Participating companies learn to confirm improvements in energy performance through evaluation and compliance with local laws.
Internal recognition: By participating in the program, companies can demonstrate their commitment to improved energy performance to customers, regulators, and shareholders.
Pilot 1: Flex
Google introduced Flex, a contract manufacturing firm, to the program in July 2017. Flex has since completed three training workshops and launched an internal energy management system using ISO 50001 standards. During the second workshop, the Flex and CNIS teams identified five major energy savings projects at Flex factories in Zhuhai and Shenzhen totaling more than 6 million kilowatt-hours (kWh) per year—equivalent to the energy consumption of over 3,500 Chinese households for one year.2
This comes on top of nearly 5 million kWh in annual savings that the supplier is already realizing through other energy-efficiency measures. The new projects—which include lighting upgrades, water heater improvements, and high-efficiency compressor installations—have estimated payback periods of less than three years, with some projects paying back in under one year. In adopting and receiving recognition for achieving ISO 50001, Flex has demonstrated environmental leadership to its employees, customers, and peers while improving business operations.
Pilot 2: Gold Circuit Electronics
Gold Circuit Electronics (GCE) began participating in the pilot program in fall 2017. GCE has since developed an action plan to adopt ISO 50001 and will receive certification by March 2019. In the first two workshops, GCE and its partners identified three immediate energy-conservation projects—including improving lighting efficiency and replacing compressors—totaling 227,000 kWh per year in potential savings. The projects will be completed by January 2019.
GCE is also participating in Google’s energy-efficiency deep retrofit program, in which energy experts will evaluate and identify savings opportunities at GCE’s other facilities.
As a result of GCE’s participation in the energy management trainings, its teams are now equipped with the knowledge to track efficiency measures and realize maximum savings.
We will finalize the pilot energy management program this year and will continue working with our suppliers to identify other opportunities to improve energy efficiency and reduce GHG emissions.
Empowering suppliers to go renewable
As we grow, Google is continuing to pursue new renewable energy initiatives for our data centers and offices. Our ultimate goal is to create a world where everyone, not just Google, has access to clean, renewable energy. This includes manufacturers and vendors in our supply chain. Our vision is for all our suppliers’ sites to source 100% renewable energy in every region where our products are made.
Currently, most suppliers depend on a local utility grid that is dominated by coal, natural gas, and other fossil-based fuel sources. Energy markets are complex, and there are often few mechanisms for companies to purchase renewable energy, or the markets won’t allow for it.
As a first step in our journey to help our suppliers transition to renewable energy, we’re committed to sharing what we’ve learned on our own path to 100% renewables. We’re launching a new program within Google to help provide suppliers with the tools and expertise they need to develop renewable energy solutions. We’re also working to transform electricity markets in key regions to create pathways for renewable energy procurement that enable thousands of suppliers, manufacturers, and other companies to access clean energy.
Google’s efforts to champion clean energy policies and market solutions around the world also benefit other companies. In 2015, Google began asking for the opportunity to buy renewable energy directly from a specific generating facility in Taiwan. In January 2017, after two years of careful consideration, the Taiwanese government amended its Electricity Act to allow direct renewable energy purchasing for customers. This will open the door for companies looking to expand infrastructure, while advancing a clean energy future. Read more about how we’re laying the groundwork for a clean energy future.
In building more opportunities for renewable energy, we will continue to collaborate with other organizations and companies that are facing similar challenges, because we know we will be more effective when we work together.
We are working with our suppliers to put in place systems to continually improve their energy performance and scale the deployment of renewable energy sources. While we don’t yet fully know when and how we’ll be able to achieve our goals—we are committed to further developing our road map—we know it will take a combination of strong collaborations, technology, policy, and new purchasing structures to get there. We’re excited by the possibilities and ready for the challenge.
1 Bloomberg New Energy Finance database for wind and solar energy power purchase agreements, as of December 31, 2017.
2 Assumes average household energy consumption in China is 1,786 kWh per household per year. Jin Guo et. al., Electricity Demand in Chinese Households: Findings from China Residential Energy Consumption Survey, American Council for an Energy-Efficient Economy, 2016, https://aceee.org/files/proceedings/2016/data/papers/9_76.pdf.