Alphabet Stock Is an ESG Investment You Didn’t Expect

Let’s be honest. Many people invest in Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) simply because it’s the parent company of Google. Or, maybe they own GOOG stock for the exposure to cloud computing technology or artificial intelligence (AI).

the google play store, youtube and gmail apps on a cellphone screen

Source: BigTunaOnline/

Those are all perfectly valid reasons to invest in Alphabet. When you put them all together, you’ve got a tech giant that provides supreme shareholder value.

However, even the biggest and best companies must adapt to consumer and investor preferences. In the 2020’s, they’re demanding that businesses stay compliant with ESG (environmental, social and governance) best practices.

Thankfully, Alphabet isn’t just compliant in this area. As we’ll see, the company is taking sustainability seriously — and this could have a positive impact on Alphabet’s bottom line.

GOOG Stock at a Glance

Is GOOG stock expensive, or it is actually a bargain? It depends on how you look at it.

On a superficial level, the stock is definitely not cheap. From $1,700 per share in January to nearly $3,000 in September 2021, Alphabet shares rallied relentlessly.

There was some volatility in late September and early October as GOOG stock pulled back to $2,700. However, this wasn’t really the company’s fault, and was attributable to a broad-market drawdown.

Now, consider this number. Alphabet’s trailing 12-month price-to-earnings ratio is just 29.66x.

That’s quite reasonable, especially for a technology stock in 2021. So actually, GOOG stock might look expensive but it’s not too pricey, after all.

Furthermore, the stock has a five-year monthly beta of 1.03. This indicates that the Alphabet share price doesn’t move much faster than the stock market overall.

Hence, you can count on GOOG stock as a “steady Eddie” kind of investment that’s not too volatile most of the time.

Check Your Footprint

Of course, we don’t need to prove that Alphabet generates revenues from its Google search engine. That’s a known factor.

On the other hand, not everybody will realize that Alphabet is making strides in sustainability. For example, Alphabet’s Google Cloud just unveiled something you might never have imagined: a carbon footprint tracker.

It’s apparently part of Alphabet’s push to help companies track and cut their carbon budgets.

At an annual customer conference, it was revealed that Google can now tell its cloud customers the carbon emissions of their cloud usage.

Plus, Google can open satellite imagery to the cloud customers for the first time for environmental analysis.

Moreover, Google has a new carbon footprint reporting tool. This, reportedly, will show the emissions associated with the electricity that was used to store and process a customer’s data.

In case all of that wasn’t enough, Google will also now warn customers when they are wasting energy on inactive cloud services.

Changing the Way You Search

Since so many people use the Google search engine, any change or addition to Google can make a big difference.

In a significant ESG-related initiative, Google announced that when someone searches for hotels, they’ll see information about the hotels’ sustainability efforts.

Some hotels will have an eco-certified badge next to their name for meeting high standards of sustainability from certain independent organizations.

Google is also working to make cars on the roadways more eco-friendly. Specifically, Google’s search engine is reportedly making it easier to:

  • See hybrid and electric vehicle options
  • Compare hybrid and electric vehicles against gas-powered models
  • Find rebates so that vehicle shoppers can know the true cost before they make a purchase

These eco-friendly features, according to Google, will start to roll out in the U.S. this year, with more to come in 2022.

The Takeaway

It’s established that Alphabet is a innovator in search engine technology as well as cloud computing and AI.

Yet, modern businesses must consider their carbon footprint, and even help their customers to stay ESG-compliant whenever possible.

It’s good to know that Alphabet and Google are making significant progress in this regard.

As a result, you can hold GOOG stock shares and feel good about your investment — it’s not only profitable, but sustainable too.

On the date of publication, Louis Navellier had a long position in GOOG. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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