Sustainable sets and nature-based investments: Inside Netflix’s new net-zero strategy
EXCLUSIVE: Netflix has this week pledged to reach net-zero emissions by 2022. In an exclusive interview with edie, the firm's sustainability officer Emma Stewart outlines how it plans to ramp up in-house carbon reductions and use offsetting to meet this new climate goal.
Announced in a blog post today, Netflix’s net-zero strategy is called ‘Net Zero + Nature’. It includes a science-based target to reduce Scope 1 (direct) and Scope 2 (power-related) emissions, coupled with new measures to invest in nature-based offsetting projects that retain existing carbon storage and create new carbon removal capacity.
The science-based target for scopes 1 and 2 targets a 45% reduction by 2030 and has been submitted to the Science-Based Targets initiative (SBTi) for approval. This means it will receive the green light within 24 months.
Speaking exclusively to edie, Stewart said that Netflix has “already identified opportunities” for delivering the science-based target for production, which accounted for half of Netflix’s absolute emissions footprint in 2020. Changes set to be made on sets include swapping diesel generators, switching to electric fleets, installing LED lighting and using demand-response systems for flexible, low-carbon energy.
Aside from production, commercial operations, including rented office space and transport, account for much of Netflix’s absolute climate footprint. These sources were attributable to 45% of annual emissions for 2020. Most of the remaining 5% was attributable to data centres.
Stewart joined Netflix late last year, following around two decades’ worth of work in sustainability consulting with a focus on cities, buildings and infrastructure – firstly at Autodesk and latterly at the World Resources Institute (WRI).
She said she has made it her mission to ensure that “everything Netflix’s sustainability team do is based in science” and outlined her long-standing interest in science-based climate targets for businesses.
“Back in 2009, when I was at Autodesk, I was tasked with creating a climate target,” she explained. “So I looked at the best-practice examples of the day and I was rather underwhelmed; barely any businesses paid any attention to the climate science. My colleagues and I spent the better part of a year designing a mathematical model that then became the first science-based target. We and BT were two companies that really pioneered that concept and helped the SBTi set up from that base.”
“Times have changed so much since then. The SBTi has its hands full reviewing and approving targets from companies now,” Stewart added, highlighting the fact that 634 firms have gained SBTi approval to date – 462 of these having developed 1.5C-aligned targets.
Science-based targets, in Stewart’s view, give credibility to Netflix’s net-zero strategy. A recent study from South Pole found that just 10% of corporates with long-term net-zero goals have verified, science-based targets in the interim.
+ Nature: Plans for offsetting
Carbon reduction forms the first pillar of Netflix’s new strategy and, Stewart said, will continue to be the priority. But the remaining two pillars – retaining existing natural carbon storage and removing more carbon from the atmosphere – are where the ‘+ Nature’ element comes in, and where residual and Scope 3 (indirect) emissions will be tackled.
Stewart explained that, in the past six months, her team have made it a priority to assess projects with a collective capability to retain and remove 140 million metric tonnes of CO2e. Projects assessed include tropical forest conservation and restoration for grasslands, soils and mangroves.
Offsetting is always a sticking point in the net-zero discussion. While some have argued that it is a suitable way for businesses – particularly those in hard-to-abate sectors – to help address the nature crisis as well as their climate footprint, challenges persist with the practicalities of projects. Critics often point to double-counting, leakage and developers over-stating their positive impact, or failing to account for unintended negative consequences.
Stewart explained Netflix’s plans to navigate this landscape using a five-step process.
She said: “The first step is to issue an RFP, very broadly but also directly, to project developers, ensuring that they personally see it. We, secondly, ensure that the project has been verified by one of the top four standards, including Gold Standard. These four bodies will then vet them against the traditional criteria of permanence, leakage, additionality, and baseline, and so on.
“This ensures a certain degree of quality – but we wanted to take additional steps. We have offsetting experts on our team personally interview each project developer to ensure that the claims in their documents are, indeed, what is happening on the ground. This adds qualitative information to the quantitative data.
“We then, where possible, work with a partner to undertake satellite imagery analysis using AI. Sometimes, this even enlightens the project developers on what is happening on the proportion of land they are protecting and restoring. It helps ensure there is not, for example, illicit deforestation.
“For the fifth and final step, we’ve assembled an advisory group with some of the world’s best luminaries in the climate and sustainability space, to advise and provoke us. Several members have expertise in voluntary carbon markets.”
Investments in existing natural habitats will begin this year. The start-date for investment in ecosystem restoration projects is 2022. Stewart said that investments in mad-made carbon capture and storage is “not off the table” in the long-term but that Netflix will prioritise nature-based solutions initially.
She explained: “Nature-based solutions are where we see immense opportunity in the short-term.
“If you take a close read of climate science… or if you listen to speakers like Paris Agreement architect Christiana Figueres, the conversation is about this decade – in particular- being critical for protecting existing nature-based carbon storage.”
In accounting for offsetting, Netflix will cover all scopes. It includes productions produced in partnerships, as well as licenced titles, in its Scope 3 accounting.
Working like a stream
Much has been said in recent months about how sustainable streaming services really are; the conversation has doubtless been amplified by the fact that, faced with lockdown restrictions, many of us are streaming more entertainment content than usual. Various national media outlets covered 2020 studies on the climate impact of the global streaming space using headlines like ‘Is your Netflix habit bad for the planet?’ and ‘ditch 4k video to fight climate change.
Stewart emphasised the fact that, for Netflix, the bulk of the carbon footprint comes from production and commercial operations. The firm uses third-party data centres to enable its service, but, while data centres are notoriously energy-hungry, they accounted for just 5% of the company’s absolute annual GHG footprint.
Aside from data centres, Stewart explained, there are a few other key emissions sources for streaming – the internet service provided to customers and the electronic devices upon which the content is watched. Both internet service providers and electronic manufacturers have made strides to improve energy efficiency and champion renewables, Stewart said, while the grid mix in many key markets has become increasingly low-carbon in recent years.
As a result, Netflix estimates that the average CO2e footprint of a streaming hour is ‘well below’ 100g. It made this calculation using a tool developed as a result of research from the University of Bristol, where teams applied the Greenhouse Gas Protocol and life-cycle assessments to streaming across the world.
“There’s a growing consensus around the robust carbon measurement of emissions from streaming,” Stewart said, stating that the ‘well below’ 100g figure is similar to that recorded by industry peers.
“There’s also consensus on what the emissions range looks like [between regions and nations]. Once that consensus is really firm, we can team up with different providers to better tackle emissions in a meaningful way.”