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Google parent company adds air quality and power shutoffs from wildfires to risk factors

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Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum (WEF) annual meeting in Davos, on January 22, 2020.

Google parent company Alphabet says it’s considering more effects of climate change as potential risks to its supply chain.

The company, which previously listed climate risks such as “sea level rising” and “flooding” in its supply chain risk factors section, listed even more examples in its 2021 10-K filing released this week.

“Air quality effects and power shutoffs associated with wildfire prevention” was added among climate change effects that either already has affected or may affect the company’s supply chain.

The addition comes as large corporations, including Google, are more public in acknowledging the effects of climate change and as executives prepare for those effects to cause disruption to businesses. States prone to wildfires have been directed to turn off their power to prevent fires from spreading in recent years. Authorities have also reported stronger weather and storm behaviors in recent years.

Alphabet, which relies on suppliers globally for manufacturing and supply chain management, stated that severe climate effects could disrupt its ability to supply hardware products as well as internet-based services.

The full paragraph listed in the company’s “supply chain” risk factors sections reads as such:

“We have experienced and/or may in the future experience supply shortages and/or price increases that could negatively affect our operations, driven by raw material, component or part availability, manufacturing capacity, labor shortages, industry allocations, logistics capacity, tariffs, trade disputes and barriers, natural disasters or pandemics, the effects of climate change (such as sea level rise, drought, flooding, heat waves, wildfires and resultant air quality effects and power shutoffs associated with wildfire prevention, and increased storm severity), and significant changes in the financial or business condition of our suppliers.”

Alphabet reported blowout fourth-quarter earnings on Tuesday, and the company’s shares gained more than 7% on Wednesday after the report.

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