Alphabet, Google’s parent company, kicked off 2025 with a solid earnings report. Despite global economic concerns and trade tensions, the company beat analyst expectations across the board. Its core businesses—Search, YouTube, and Cloud continued to grow, showing strong momentum and revenue. However, with a massive upgrade in AI infrastructure, emissions have risen. Can Google still meet its net-zero target?
Alphabet’s Revenue Jumps Amid Economic Uncertainty
Alphabet reported $90.2 billion in revenue for the first quarter. That’s a 12% increase from $80.5 billion in Q1 2024. Analysts had expected $89.2 billion. Net income came in at $34.54 billion, up 46% from $23.66 billion a year ago.
Earnings per share (EPS) hit $2.81, far above the expected $2.01. Operating income rose 20% to $30.6 billion. Plus, the company’s operating margin expanded to 34%, which is higher than last year.
CEO Sundar Pichai, confirmed by saying,
“We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full-stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation. Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month. Driven by YouTube and Google One, we surpassed 270 million paid subscriptions. And Cloud grew rapidly with significant demand for our solutions.”
Google Search, YouTube, and Cloud Drive Growth
Google Search brought in $50.7 billion in revenue. YouTube ads earned $8.93 billion, up from $8.09 billion a year earlier. Google Services, which includes Search, YouTube, subscriptions, and device sales, generated $77.3 billion—a 10% increase from last year.
Meanwhile, Google Cloud stood out. The cloud business earned $12.3 billion, growing 28% from $9.57 billion in Q1 2024. This growth was fueled by demand for Google Cloud Platform, AI infrastructure, and generative AI tools.
Shareholders Win Big
Alphabet didn’t just report big profits, it also rewarded investors. The board approved a massive $70 billion stock buyback plan. In addition, the company raised its quarterly dividend by 5% to $0.21 per share.
Right after the earnings release, Alphabet’s stock jumped 5% in after-hours trading. Shares hit $169, the highest level in four weeks.
AI Still the Focus Despite Trade Tensions
Even with rising costs and trade tensions between the U.S. and China, Alphabet is staying aggressive. The company confirmed it will stick to its $75 billion capital spending plan for 2025. A large portion of that will support AI infrastructure and data centers.
Analysts have raised concerns about Big Tech pulling back on data center projects. But Alphabet and its peers, like Meta and Amazon, remain committed, giving AI investment a top priority.
For now, Alphabet shows strong growth for the rest of the year.
Google’s Emissions Are Rising, Not Falling
Google aims to hit net-zero emissions across its operations and supply chain by 2030. The company is leaning on two major strategies: cutting emissions in all possible areas and removing the remaining emissions through carbon removal.
In 2023, Google’s total greenhouse gas (GHG) emissions hit 14.3 million metric tons of CO₂ equivalent. That’s a 13% jump from 2022. While the growth slowed compared to past years, the trend still moved in the wrong direction. Most of the rise came from higher energy use at data centers and emissions from its supply chain.
Scope Emissions
- Scope 1 (direct) emissions: 79,400 tCO₂e (1% of total)
- Scope 2 (indirect from electricity): 3.4 million tCO₂e (24%)
- Scope 3 (supply chain and other indirect emissions): 10.8 million tCO₂e (75%)
Although Google has made progress, its emissions increased in 2023, highlighting the challenge of scaling digital services while reducing carbon emissions. Especially with the unpredictable energy demands of artificial intelligence (AI).
Google’s Roadmap to a Net-Zero Future
Google aims to cut its emissions by 50% by 2030 using 2019 as the baseline. However, after updating how it measures emissions, the company now reports a 48% rise from 2019.
Renewable Energy
Google has run on 100% renewable energy for seven years straight. But under current standards, this hasn’t cut its market-based Scope 2 emissions. Its new goal is to run all operations on 24/7 carbon-free energy (CFE) by 2030. In 2023, it hit 64% CFE globally.
Energy Efficient Data Centers
Google’s data centers are 1.8 times more energy efficient than typical enterprise setups. In 2023, its average Power Usage Effectiveness (PUE) was 1.10, well below the industry average of 1.58.
Another example is its AI hardware, TPU v4 chips, which are 2.7 times more efficient than their predecessors.
Using AI to Slash Emissions
Furthermore, it is developing tools to reduce the energy needed to train AI models by up to 100 times. They can slash emissions by as much as 1,000 times.
Their Gemini 1.5 Pro model delivers performance similar to Gemini 1.0 Ultra but with far less computing power. Google is also guiding software developers through its “Go Green Software” initiative to shrink their environmental impact.
Practical examples of AI in action include:
- Fuel-efficient navigation, cutting 2.9 million metric tons of emissions since 2021.
- Flood forecasting tools are used in over 80 countries.
- The Green Light initiative is to optimize traffic signals.
Google is also building AI-powered systems to predict extreme heat, detect cool roofs, and track methane leaks. These tools show how AI can play a key role in solving environmental problems.
Betting Big on Carbon Removal Credits
Google knows how important it is to remove residual emissions to hit its net-zero target. That’s where carbon removal and high-quality carbon removal credits are immensely useful.
- In 2022, it pledged $200 million to Frontier, an initiative to boost carbon removal technologies by committing to buy future credits.
- Signed deals with Charm Industrial, Lithos Carbon, and CarbonCapture through Frontier. These deals represent about 62,500 metric tons of carbon removal credits to be delivered by 2030.
- Joined a U.S. Department of Energy program to match carbon removal purchases, aiming to lock in at least $35 million worth of credits within a year.
Nature-Based Solutions
Furthermore, Google has also invested in nature-based removals. To support carbon credit markets, it gave more than $7 million in grants to organizations like The Gold Standard and ICVCM.
Google’s large-scale commitments are:
- Purchased 200,000 tons of removal credits from Terradot, which uses enhanced rock weathering.
- Bought 50,000 tons from Brazilian startup Mombak, which is focused on reforestation in the Amazon.
- A partnership with Holocene to capture 100,000 tons of CO₂ by 2032.
These investments reflect its transition from short-term carbon neutrality and focusing on long-term carbon removal solutions.
Google’s environmental efforts show its huge strides in clean energy and AI-driven efficiency. Yet emissions are still rising. As 2030 approaches, the big question is, can Google truly deliver on its net-zero promise while expanding its tech empire? Only time will tell.
- ALSO READ: Google Rides the Wind: First Offshore Wind Deal in Asia Pacific For 24/7 Carbon-Free Energy and Meta, Google, and Amazon Join Global Pledge to Triple Nuclear Energy by 2050
The post Alphabet Smashes Q1 2025 Expectations with Strong Growth But Emissions Are Rising appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Renewable Energy11 months agoSending Progressive Philanthropist George Soros to Prison?
-
Greenhouse Gases1 year ago
嘉宾来稿：探究火山喷发如何影响气候预测
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits