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Practical Magic

Netflix’s behind-the-scenes script for achieving net-zero

Kasigau Corridor REDD+ project
Filip Agoo, Create the Change, on behalf of Everland

With more than 204 million paid memberships, Netflix self-describes as the world’s "leading" streaming media service. Traditionally, it hasn’t said much about addressing its emissions and other environmental impacts but the company stepped into the spotlight this week with a net-zero emissions pledge. 

That shouldn’t surprise you. But other companies could learn a thing or two from Netflix’s move to be transparent about the coming attractions of its strategy — and just how much work lies in this pre-production phase, if you will. 

The plan was developed by Netflix’s "inaugural" CSO Emma Stewart, a well-known sustainability professional who was involved in the development of the frameworks for science-based targets and wrote one of the first corporate expressions of that strategy for software developer Autodesk, where she was previously employed. She made the leap to Netflix in October after advising its team for about eight months as a consultant with Engie Impact. 

Netflix’s net-zero script is pretty linear, calling for it to cut Scope 1 and Scope 2 emissions by 45 percent by 2030, in line with science-based targets guidelines. There are three primary plot lines it hopes will lead to a happy ending: measures to reduce the impact of its operations and, more important, the footprint associated with its original productions; support for conservation of "at-risk natural areas" such as tropical forests that are important for Earth’s existing carbon storage capacity; and restoration of degraded ecosystems, with a particular focus on grasslands and mangroves.

We’re very aware of the risk of double counting, leakage, permanence and other issues that are counterproductive to the results the world needs.

"Nature is at the heart of our commitment, as environmental leaders like Christiana Figueres tell us we can’t achieve climate goals without protecting and regenerating natural ecosystems," Stewart wrote in the blog introducing the strategy. "This approach buys us time to decarbonize our economy, while restoring these life support systems."

Netflix estimates its carbon footprint at 1.1 million metric tons, about 50 percent of which is related to the physical production of Netflix-branded films and series. Forty-five more comes from its corporate offices (most of which it leases) and the goods that it procures. Just 5 percent comes from the data centers and other systems behind its content delivery network: Netflix doesn’t hold itself accountable for emissions related to devices that audiences (or binge-watchers!) use.

When I spoke with Stewart last week, one of the first questions I asked her to address was the actual steps Netflix is taking to reduce its footprint. The measures fall into these three buckets — optimize, electrify and decarbonize — and there’s a specific storyline for each of its Scope 1 and Scope 2 emissions sources. "The hierarchy is so important," Stewart said. "You need to squeeze out the waste first."

When it comes to production, for example, Netflix is hiring local crews to cut back on transportation emissions, installing batteries powered by clean energy to reduce its reliance on diesel generators and buying into local renewable energy programs. On the operations side, even though it doesn’t own a lot of real estate, Netflix will be taking up residence in a new building on Sunset Boulevard in Hollywood that beats California’s energy requirements by about 15 percent and includes features such as building-integrated solar photovoltaics. And when it comes to addressing its streaming delivery service, you can expect it to start requiring data center and technology providers to be forthcoming about their own footprints. If not, it could decide to go elsewhere.

As everyone reading this article probably has guessed, the Netflix strategy also will rely on buying carbon offsets. No real plot twists there, and it plans to invest in enough removal offsets by the end of 2022 to achieve its net-zero claim. To get there, Netflix created a five-step process to assess and approve those purchases very carefully. 

"We’re very aware of the risk of double counting, leakage, permanence and other issues that are counterproductive to the results the world needs," Stewart wrote in another blog post focusing on the technical aspects of Netflix’s announcement this week. "In particular, the recent global demand for carbon removals projects has challenged the existing capacity of the voluntary carbon markets to deliver high-quality removal tons at scale." 

When I spoke with her last week, Stewart outlined those steps, inspired by the Oxford Principles for Net-Zero Aligned Carbon Offsetting, which include:

  1. Issuing "competitive" requests for proposals to more than 75 project developers, nonprofits and other organizations in the offsets ecosystem — reflecting different project types and geographies.
  2. Requiring all credits to be registered on a "trusted" registry, certifying that they are additional, verified, based on a "realistic baseline," not double-counted and include provisions for ensuring permanence and avoiding leakage.
  3. Holding live interviews with potential project developers and their partners.
  4. Seeking projects that use technologies such as satellite imagery powered by artificial intelligence, machine learning or remote sensors to verify results.
  5. Sending its shortlist to an external advisory group for review. Those advisers are well-known climate scientists and researchers, including Figueres and her Global Optimism co-founder Tom Rivett-Carnac, atmospheric climatologist Katharine Hayhoe and youth activist Xiye Bastida, who focuses extensively on Indigenous rights and environmental justice issues.

Beyond that, watch for Netflix to select projects in locations that have special significance to the company — this week it announced support for the Kasigau Corridor REDD+ Project in Kenya, near a national park that will be featured in an upcoming series. Marine forests, such as the one featured in the Oscar-nominated documentary "My Octopus Teacher," are also likely to get top billing. There's a reason: Last year, 160 million Netflix "households" tuned in to at least one film or program related to its programming around nature and planetary sustainability, the company estimates.

"The atmosphere doesn’t care where the emissions happen, but there are local benefits when it comes to where you remove them," Stewart said, describing its prioritization strategy. "You can expect us to prioritize projects that have proximity to our own facilities or a tie-back to programs on our service."

It’s instructive to hear about how Netflix plans to try to ensure that its carbon offsets are evaluated carefully. Microsoft also has prioritized a thorough RFP process for its carbon removal investments, in collaboration with two third-party specialists, Carbon Director and Winrock International.

The whitepaper Microsoft published about the initiative is a must-read — although there are no real cliffhangers (points to readers who know the origin of that term). As more companies start seeking projects of their own, they also might want to take cues from Stripe and Shopify, both of which I’ll be spending more time investigating in coming weeks. 

Consider that last statement as part of scenes from coming attractions. 

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